Every cloud has a silver lining. While imports are outpacing exports right now, that doesn’t mean that opportunities to play this imbalance with exchange traded funds (ETFs) don’t exist.
The U.S. trade deficit unexpectedly widened in May for the second month as imports outpaced exports, while most economists had expected the deficit to fall to $39.4 billion. According to the Associated Press, imports climbed 2.9 % to an 18-month high of 194.5 billion dollars while exports rose 2.4 % to a 19-month high. [ETFs: Your Friend in Volatile Times.]
This is indicative of a suppressed U.S. economic recovery as stunted trade could hurt any beginning of a recovery. But with that comes more growth for overseas markets. PR NewsWire reports that China is importing and exporting goods at a record pace. Container traffic moving through Chinese ports soared by 21.9% in May from a year earlier, hitting an all-time monthly high. [How to Indirectly Play the Yuan with ETFs.]
For more stories about consumer discretionary, visit our retail category.
- SPDR S&P International Cons Disc (NYSEArca:IPD) – Consumers are importing more autos, and this ETF has heavy exposure to auto makers, including Toyota, Hyundai, Nissan, Daimler and Honda.
- SPDR S&P Homebuilders (NYSEArca:XHB) – New homeowners purchasing furniture caused an 18 % surge in furniture imports, but the increase is not expected to last as tax credits expire.
- Vanguard Consumer Discretionary (NYSEArca: VCR) – Holds discretionary companies such as Target, Lowe’s, Home Depot and Walt Disney – many of these companies get their goods from China.
- SPDR S&P Retail (NYSEArca: XRT) – Holds consumer discretionary companies like Priceline, AutoZone, Abercrombie & Fitch and PetSmart.
- PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ) – Americans are primarily importing goods from China, which could translate into rewards for ETFs that hold Chinese companies.
- Claymore Delta Global Shipping (NYSEArca: SEA) – Those goods have to get from Point A to Point B somehow, don’t they?
Tisha Guerrero contributed to this article.
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.