Amazon Is Keeping Consumer Discretionary ETFs Afloat | ETF Trends

The consumer discretionary sector and related ETFs have brushed off the broad market sell-off all due to’s (NasdaqGS: AMZN) stellar fourth quarter results.

The Consumer Discretionary Select Sector SPDR Fund (NYSEArca: XLY) rose 0.5% on Friday, compared to the 1.7% drop in the S&P 500.

Fueling the strength in the consumer discretionary sector, shares jumped 7.7% after reporting fourth quarter results Thursday. The broader consumer sector may not have done as well as Amazon, but AMZN’s hefty 24.0% weight in XLY’s underlying portfolio more than offset any weakness in other areas of the consumer discretionary space.

Amazon revealed annual profits of $11.59 billion, up 15% from 2018, showing an improvement in profits from years past when the company had one year in which it recorded earnings above $1 billion, the Wall Street Journal reports.

The online retailer is finally entering a new era of profitability and is set to generate significant volumes of cash, according to R5 Capital. The company showed that it ended the fourth quarter with $55 billion in cash and marketable securities.

Amazon blew “Wall Street’s expectations out of the water,” Reid Greenberg, an analyst at consulting firm Kantar, told the WSJ, noting that the company’s profits are growing rapidly in advertising.

The e-commerce giant is also on pace to close above $1 trillion in market value for the first time, potentially joining an illustrious club that includes Apple, Microsoft and Google’s Alphabet.

Fueling the growth, Amazon’s sales from October to December surged roughly 21% to a record-breaking $87.4 billion.

“We saw essentially very strong holiday performance from the middle of November on,” Amazon Chief Financial Officer Brian T. Olsavsky told the WSJ.

The internet retailer’s growth also reflects a growing trend in consumer habits as other retailers with more significant bricks-and-mortar presence struggle.

For more information on the retail sector, visit our retail category.