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U.S. Retail Sales Upbeat in June: 4 Industry ETFs & Stocks to Win
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U.S. retail sales gained 0.6% sequentially in June 2021, following a revised 1.7% drop-off in May and breezing past market expectations of a 0.4% decline, as demand for goods remained strong despite the recent move toward spending to services.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any massive jump in it will likely brighten the economic growth picture. Below we highlight a few areas and the related ETFs that benefited the most.
Winning Sectors
Electronics and Appliances
Sales of this category rose 3.3% sequentially. Year over year, sales were up 37.3%. Consumers’ interest in buying electronics products should keep demand for semiconductors high.
The Aarons Company Inc.
The Zacks Rank #3 company is an omnichannel provider of lease-purchase solutions.
The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees. The fund has a Zacks Rank #3.
Energy
Gasoline sales jumped 2.5% sequentially in the month and 37.1% year over year.
The Zacks Rank #2 company is the owner and operator of regasification units at the Sabine Pass LNG terminal, located in Cameron Parish, LA. The stock currently has a Zacks Rank #2.
The underlying Gasonline Price Index looks to reflect the changes of the price of gasoline, as measured by the price of the contract on unleaded gasoline for delivery to the New York harbor, traded on the NYMEX that is the near month to expire, except when the near contract is within two weeks of expiration, in which case it will be measured by the contract that is the next month contract to expire. The fund charges 75 bps in fees.
Clothing & Miscellaneous Store Retailers
Many mall-based clothing stores were closed amid lockdowns last year. So, pent-up demand boosted spending in this segment. Apparel and accessories sales gained 2.6% sequentially in the month and 47.1% year over year. Sales at miscellaneous store retailers gained 3.4% sequentially and 22.8% year over year.
Apparel Retail takes about 18.76% of the fund SPDR S&P Retail ETF (XRT - Free Report) . The fund is thus well-positioned to benefit from the trend. Internet & Direct Marketing Retail (20.68%), Automotive Retail (19.71%), Specialty Stores (16.10%) and Food Retail (6.18%) are four other main areas of the fund.
For single-stock selection, Zacks Rank #1 (Strong Buy) Abercrombie & Fitch Company (ANF - Free Report) appears as a nice bet here.
Food services & Drinking Places
Sales of this category gained 2.3% sequentially in June and 40.2% year over year.
This ETF is active and does not track a benchmark. It gives exposure to companies that derive at least 50% of their net revenues from the restaurant business.
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U.S. Retail Sales Upbeat in June: 4 Industry ETFs & Stocks to Win
U.S. retail sales gained 0.6% sequentially in June 2021, following a revised 1.7% drop-off in May and breezing past market expectations of a 0.4% decline, as demand for goods remained strong despite the recent move toward spending to services.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any massive jump in it will likely brighten the economic growth picture. Below we highlight a few areas and the related ETFs that benefited the most.
Winning Sectors
Electronics and Appliances
Sales of this category rose 3.3% sequentially. Year over year, sales were up 37.3%. Consumers’ interest in buying electronics products should keep demand for semiconductors high.
The Aarons Company Inc.
The Zacks Rank #3 company is an omnichannel provider of lease-purchase solutions.
VanEck Vectors Semiconductor ETF (SMH - Free Report)
The underlying MVIS US Listed Semiconductor 25 Index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 bps in fees. The fund has a Zacks Rank #3.
Energy
Gasoline sales jumped 2.5% sequentially in the month and 37.1% year over year.
Cheniere Energy Partners LP (CQP - Free Report)
The Zacks Rank #2 company is the owner and operator of regasification units at the Sabine Pass LNG terminal, located in Cameron Parish, LA. The stock currently has a Zacks Rank #2.
United States Gasoline ETF (UGA - Free Report)
The underlying Gasonline Price Index looks to reflect the changes of the price of gasoline, as measured by the price of the contract on unleaded gasoline for delivery to the New York harbor, traded on the NYMEX that is the near month to expire, except when the near contract is within two weeks of expiration, in which case it will be measured by the contract that is the next month contract to expire. The fund charges 75 bps in fees.
Clothing & Miscellaneous Store Retailers
Many mall-based clothing stores were closed amid lockdowns last year. So, pent-up demand boosted spending in this segment. Apparel and accessories sales gained 2.6% sequentially in the month and 47.1% year over year. Sales at miscellaneous store retailers gained 3.4% sequentially and 22.8% year over year.
Apparel Retail takes about 18.76% of the fund SPDR S&P Retail ETF (XRT - Free Report) . The fund is thus well-positioned to benefit from the trend. Internet & Direct Marketing Retail (20.68%), Automotive Retail (19.71%), Specialty Stores (16.10%) and Food Retail (6.18%) are four other main areas of the fund.
For single-stock selection, Zacks Rank #1 (Strong Buy) Abercrombie & Fitch Company (ANF - Free Report) appears as a nice bet here.
Food services & Drinking Places
Sales of this category gained 2.3% sequentially in June and 40.2% year over year.
Papa Johns International Inc. (PZZA - Free Report)
Zacks Rank #2 company operates and franchises pizza delivery and carryout restaurants in the United States and other specific international markets.
AdvisorShares Restaurant ETF (EATZ - Free Report)
This ETF is active and does not track a benchmark. It gives exposure to companies that derive at least 50% of their net revenues from the restaurant business.