Everyone knows how important Black Friday is for the retail sector, but the buildup in the last few weeks has been almost as pivotal.
The SPDR S&P Retail ETF offers specialized exposure to the retail component of the total stock market, covering 79 stocks across various retail sub-sectors. Despite healthy retail sales and improving consumer sentiment, risks such as a higher threshold of inventories, steep listing prices, and potential tariffs could impact future performance. XRT's valuation appears attractive relative to the broader market, but its yield is sub-par, and the risk-reward on the charts does not look ideal.
I have been very clear about waiting for the “inside” sectors to reconcile their trading ranges before loading up on new equity positions. I have been equally clear on investing in hard assets, especially now as we have even more reasons to believe that prices of necessities are not going lower anytime soon.
Aneesha Sherman, Bernstein Research's U.S. apparel and specialty retail vice president, joins CNBC's 'Closing Bell' to discuss rising consumer sentiment, her retail outlook for the holiday shopping season, and more.
Simeon Gutman, U.S. retail analyst at Morgan Stanley, joins CNBC's ‘The Exchange' to discuss consumer sentiment, how rate cuts will affect retailers through the holiday season, and more.
Written last week, “Retail XRT continues to have my attention. I will follow her.
Most of the big-box retailers came up with an earnings or revenue beat or both.
In the Economic Modern Family, the most interesting sector is Retail XRT. After the strong consumer confidence, the ETF looks like a move over July highs should be followed.
The July Retail Sales report and August Johnson Redbook figures show strong consumer spending, benefiting consumer companies and supporting a soft economic landing. I reiterate the SPDR S&P Retail ETF a buy due to its attractive valuation, decent technicals, and diversified exposure to retail sub-industries. Despite historical September weakness, XRT's technical setup is favorable, with a rising 200-day moving average and potential upside if resistance at $80 is broken.
The SPDR S&P Retail ETF (XRT) remains in focus on Thursday after sector heavyweights Target (TGT), TJX Companies (TJX), and Macy's (M) reported earnings on Wednesday. The three retailers, which carry a cumulative weighting in the fund of around 4%, noted that while consumers remain prudent, there are signs of a rebound in discretionary spending in areas such as apparel and beauty.
The SPDR S&P Retail ETF offers diversified exposure to various sub-industries within the retail sector. The fund has gained momentum over the past year amid resilient economic conditions. Mixed signals from leading retailers and uncertain macroeconomic conditions could add to volatility going forward.