Traders looking for opportunities in the economic re-opening can considering a rebounding retail sector with funds like the Direxion Daily Retail Bull 3X ETF (RETL).

While the online sector did prosper during the pandemic, the retail industry could get an added jolt. With consumers ready to start opening their wallets again, this could be a major tailwind.

“Online retailers have done very well during the past year with the industry growing 44% in 2020, and could rake in even more money as spending becomes more widespread,” a Direxion Investments “The X-Change” article noted. “Much of the United States retail and discretionary spending sectors not only appear to be gearing up for a return to some semblance of normalcy, but are also expecting a surge in spending from pent-up demand.”

Stimulus dollars are an additional catalyst. Can traders bank on consumers using their stimulus checks on goods and services?

“With all the money saved up from a lot of rainy days, and stimulus checks sent out to many, spending power has come around, but without as many things and experiences to spend it on,” article said further. “Investors who have a bullish outlook on upcoming consumer spending activity in the discretionary economy may want to look into tools and vehicles to leverage the current trends to their advantage.”

RETL seeks daily investment results of 300% of the daily performance of the S&P Retail Select Industry Index. With that extra leverage comes exhilarating gains. The fund up over 130% year-to-date.

RETL Chart

A Strong Rebound for Brick-and-Mortar Retail?

Online retail may have the spotlight, but brick-and-mortar retail is starting to show signs of life. Consumers are returning to physical locations to shop.

“The double dip of broadening vaccine distribution and another federal stimulus helped motivate shoppers toward physical retailers during the year’s first three months, pushing total Q1 retail sales to a whopping 34.7% gain year over year, according to Cushman & Wakefield’s latest U.S. National Retail Market Beat report,” a Scotsman Guide report reported.

“The commercial real estate services firm expects that robust consumer spending pattern to maintain throughout 2021, citing almost $2.6 trillion in excess savings that Americans have built up, wary of spending during the earlier stages of the COVID-19 pandemic,” the report added.

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