You might expect retail exchange traded funds (ETFs) to get a boost from the numbers. But here’s the thing: the growth in consumer spending in July wasn’t uniform.
Generally, retail sales in July rose 0.4%. Tepid, but it was about as expected. And hey – it was growth, so we’ll take it where we can get it.
But the gains in retail spending were primarily seen in auto sales and spending on gasoline. Excluding those two areas, sales actually fell 0.1%. [Pockets of Strength in Retail ETFs.]
There are a few ETFs to play these various segments directly, instead of as a part of a broader, all-purpose retail ETF:
- SPDR S&P International Consumer Discretionary (NYSEArca: IPD): While this ETF has heavy exposure to a lot of products consumers aren’t buying these days, one thing it has going for it is high exposure to automakers such as Toyota, Honda, Daimler AG, Hyundai, Nissan and Fiat.
- United States Gasoline (NYSEArca: UGA): In general, gas prices have been on an uptrend these days. This ETF holds futures contracts. Just be aware of contango!
- Consumer Staples Select Sector SPDR (NYSEArca: XLP): Consumers aren’t out buying things they don’t need right now; they’re scaling back to the essentials that help them get through daily life. This ETF plays it.
For more stories about consumer spending, visit our retail category.
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.