First, the good news: consumer spending rose in July. Next, the not-so-good news: they’re not frivolously throwing their cash around. And finally, more good news: you can still play consumer spending trends with exchange traded funds (ETFs).
A modest uptick in consumer spending was reported in July, up by $44.1 billion last month, or 0.4%, after falling less than 0.1% in June. This came in above the 0.3% increase economists expected. Julieanne Pepitone for CNN Money reports that the spending jump was linked to a rise in car sales, which could be “a seasonal quirk” because some auto plants stayed open in the summer. [How to Play with July Retail Spending With ETFs.]
Although spending has increased, the fact is that Americans are still wary of spending their money on little else but necessities. ETF Zone Staff for ETF Zone reports that at times like these, when people may be just getting by, the consumer staples ETFs and stocks are a great way to play the market. [ETFs To Cope With Slow Spending.]
Consumer staples ETFs are funds that hold manufacturers and marketers of products that won’t be cut from the household budget. This includes food, beverages, prescription and over the counter drugs and household cleaning products.
- iShares S&P Global Consumer Staples (NYSEArca: KXI): Although KXI is an international fund, more than 52% of the fund is allocated to U.S. corporations. It’s the top-performing staples ETF in the last month, as well, up 1.1%.
- SPDR S&P Retail (NYSEArca: XRT)
- First Trust AlphaDEX Consumer Staples (NYSEArca: FXG)
- PowerShares Dynamic Consumer Staples (NYSEArca: PSL)
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. 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.