Retail sector ETFs such as SPDR S&P Retail (NYSEArca: XRT) could see action later this week as some major holdings announce quarterly financial results.
July has seen mixed results from same-store stores, as the month is usually the second-slowest for the retailers and related sector.
“The month’s results matter because they represent the latest read on consumer spending patterns ahead of the very important back-to- school selling period,” Charles Grom, retail analyst from Deutsche Bank, said in a WSJ.com report.
According to a Deloitte survey, about one-third of consumers are planning on spending more for back-to-school clothes and wares, but not because of excess cash. Consumers are forced to accept the higher prices that have been common in the retail sector.
“Given the uncertain macro backdrop and several data points indicating recent global slowdown in Europe and Asia, expectations are low,” Randal Konik, retail analyst at Jefferies & Co. said.
Major retailers such as JC Penny (NYSE: JCP), Kohl’s (NYSE: KSS) and Nordstrom (NYSE: JWN) are scheduled to report quarterly earnings later this week. The fact that food and energy prices are elevated, and many Americans are without jobs is a poor backdrop for the retail sector.