There is some good news that consumers are beginning to spend again, but how much and is it enough to heal markets and exchange traded funds (ETFs) is yet to be seen.

The rapid recovery in stock prices has consumers and U.S. companies hopeful that a “wealthy” feeling will return and Americans will once again spend, spend, spend. One economist points out that housing is still showing weakness, meaning that it could be awhile before consumers are in a real mood to shop with confidence.

Economist suggest that overall, the economy is recovering and that a bottom in housing may have already been touched.

One thing is for certain: it’s not as though Americans don’t want to shop.

Sandra M. Jones for The Chicago Tribune reports that there are increasing signs of pent-up demand. Consumers are tired of saving their pennies. One study found that one in four women are ready to treat themselves to a new outfit, a vacation, an evening on the town or something new for the home.

Despite that, many consumers still want a bargain if they are going to spend. Perhaps they’ll plan that vacation with Expedia (EXPE) to get a low price, and buy that new outfit at JC Penney (JCP). That could mean that some retail-oriented ETFs will continue to hold companies that have a bent toward value. However, some shoppers are still looking for luxury – investors who want to capitalize on the spending habits of the wealthy can do that with ETFs, too.

  • SPDR S&P Retail (XRT): up 56% year-to-date

  • Consumer Staples Select Sector SPDR (XLP): up 1.9% year-to-date

  • Claymore/Robb Global Luxury Report (ROB): up 31.2% year-to-date


For more stories about retail, visit our retail category.

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.