Will this holiday shopping season be a game of shopper-retailer chicken? And what will this do to the retail-focused exchange traded funds (ETFs)? Many are convinced that the subprime mortgage crisis and credit crunch will lead many consumers to tighten their wallets this holiday season. Shoppers will hold off, in hopes that retailers will slash prices. Retailers will hold firm, hoping that shoppers will ultimately cave in and buy. Sarah Gardner for Marketplace reports that there is one expert who believes early bird shoppers will come out to preview the best buys and sales, but mostly for big-ticket items such as televisions and computers. When it comes to most of the other consumptive items, they will stand firm and wait for better deals.
Nevertheless, this will be an interesting shopping season, as inflation looms and the U.S. dollar continues to weaken. Retail focused ETFs are already down for the count this year.
- SPDR S&P Retail (XRT) down 9.1%
- PowerShares Dynamic Retail (PMR) down 12.9%
- Retail HOLDRs (RTH) down 3.2%
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.