Christmas came early for retailers as a strong showing in sales during Thanksgiving, Black Friday and Cyber Monday gave retail-focused exchange-traded funds (ETFs) a boost, including the Direxion Daily Retail Bull 3X ETF (NYSEArca: RETL), which was lifted past its 200-day moving average.
Based on Yahoo! Finance performance figures, RETL is up 3.05% year-to-date and 51.60% the past year. In the last 5 days, RETL moved past its 200-day moving average with a tailwind of strong Black Friday sales amounting to a record $6.22 billion, according to Adobe Analytics.
RETL seeks daily investment results of 300% of the daily performance of the S&P Retail Select Industry Index. RETL invests in securities found within the index, which is a modified equal-weighted index that measures the performance of the stocks comprising the S&P Total Market Index.
If Black Friday wasn’t enough to prop up retail exchange-traded funds (ETFs), RETL got an additional boost from Cyber Monday sales reaching a record $7.9 billion, according to data from Adobe Analytics, which represented a 19.3% increase from a year ago. Retail sales on Thanksgiving Day also represented a strong online presence–a total of $3.7 billion.
The sales increase, especially for Cyber Monday, speaks to the obvious shift of consumer spending habits from brick-and-mortar retail to the convenience of online shopping. This constant year-over-year migration from brick-and-mortar to online was evident as visits to physical retail stores was down for a fifth straight year, according to a Wall Street Journal report.
However, the drop in 2018 wasn’t a steep drop-off from 2017 as consumers still use physical stores to purchase items they know are in stock or want to view an item prior to purchasing it online for a better price. If the trend persists, the holiday shopping through Christmas should sustain, but beyond that will be the biggest question–especially with trade wars looming.
U.S. President Donald Trump and China president Xi Jinping are scheduled to meet at the G-20 Summit in Buenos Aires this Friday. Of course, the hope for the capital markets is that both sides settle their differences on trade, which could send the retail sector, and all sectors for that matter, soaring.
“Any positive developments from the Fed or the Chinese (are) going to send these things roaring,” said CNBC’s Jim Cramer on a recent episode of “Mad Money.” “It’s all about assessing the risk-reward, and some of these names, I think, have become a lot more attractive.”
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