Consumer Spending, Home Sales Lead ETFs South
August 3rd, 2010 at 8:30am by Tom Lydon
Exchange traded funds (ETFs) are pausing for breath early this morning after several days of gains in the wake of a spate of gloomy numbers about the broader American economy.
The Dashboard shows that most ETFs are trading lower, although there are some early movers, such as the Market Vectors Junior Gold Miners (NYSEArca: GDXJ) and Claymore/MAC Global Solar Energy (NYSEArca: TAN).
Personal incomes didn’t rise in June, so naturally consumer spending didn’t increase, either. Additionally, Americans saved at the highest rate in almost a year. Though income and spending numbers didn’t change, they didn’t improve, either, disappointing analysts who continue to look for signs of a recovery outside of corporate America. Retail ETFs haven’t reflected this downbeat sentiment – in the last month, ETFs that track the activity of consumers are positive anywhere from 6% to 14%. The top performer has been Claymore Robb Global Luxury (NYSEArca: ROB), up 14%. [Consumer ETFs: Going Global to Find Strength.]
In yet more discouraging news, factory orders also fell in June by 1.2%. It was the second straight drop on the heels of nine months of gain. Cited in the report was lower demand for steel, construction equipment and aircraft. Market Vectors Steel (NYSEArca: SLX) hasn’t felt the pain – in the last month, it’s up about 17.6%. [Steel ETFs Facing Headwinds?]
More weakness in real estate, too: in June, pending home sales fell 2.6%. The numbers are a measure of the number of buyers who signed contracts to purchase homes. Sales are now at the lowest on record and down 19% from a year ago. Inventory is up, too: at this rate, it will take nine months to sell all the homes on the market, the highest level since last year. SPDR S&P Homebuilders (NYSEArca: XHB) is down 2.2% this morning, although it has fared better in the last month, gaining 10.3%. [Homebuilder ETFs: Behind the Numbers.]
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.