Retail sales in the United States rose 0.6% sequentially in June 2021, following a revised 1.7% decline in May and earlier market expectations of a 0.4% decline as demand goods has remained strong despite the recent shift towards spending on services.
Consumer spending accounts for about 70% of US economic activity. So any massive jump in it will likely improve the picture of economic growth. Below, we highlight a few areas and related ETFs that have benefited the most.
Electronics and household appliances
Sales in this category increased 3.3% sequentially. Year over year, sales increased 37.3%. Consumer interest in purchasing electronic products is expected to keep demand for semiconductors high.
Aarons Company Inc. AAN
Zacks Rank # 3 is an omnichannel hire-purchase solutions provider.
VanEck vector semiconductor ETF SMH
The underlying MVIS US Listed Semiconductor 25 index tracks the overall performance of companies involved in semiconductor production and equipment. The fund charges 35 basis points in fees. The fund has a Zacks Rank # 3.
Gasoline sales jumped 2.5% sequentially during the month and 37.1% year-over-year.
Cheniere Energy Partners LP CQP
Zacks Rank # 2 owns and operates regasification units at the Sabine Pass LNG terminal located in Cameron Parish, LA. The stock currently has a Zacks Rank # 2.
US Gasoline ETF UGA
The underlying gasoline price index appears to reflect changes in the price of gasoline, as measured by the contract price on unleaded gasoline for delivery to New York Port, traded on the NYMEX which is the month close to expiration, except when the close contract is within two weeks of expiration, in which case it will be measured by the contract which is the next contract of the month to expire. The fund charges 75 basis points in fees.
Clothing stores and miscellaneous stores
Many clothing stores in malls were closed amid closures last year. Thus, pent-up demand stimulated spending in this segment. Clothing and accessories sales grew 2.6% sequentially on the month and 47.1% year-on-year. Sales at various retail stores increased 3.4% sequentially and 22.8% year-on-year.
Apparel Retail takes around 18.76% of the fund SPDR S&P Retail ETF XRT. The fund is therefore well positioned to take advantage of the trend. Internet & Direct Marketing Retail (20.68%), Automotive Retail (19.71%), Specialty Stores (16.10%) and Food Retail (6.18%) are the other four main areas of the fund.
For single stock pick, Zacks Rank # 1 (strong buy) Abercrombie & Fitch Company ANF seems like a good bet here.
Food services and drinking places
Sales in this category were up 2.3% sequentially in June and 40.2% year-over-year.
Papa Johns International Inc. PZZA
Zacks Rank # 2 Company operates and franchises pizza delivery and delivery restaurants in the United States and other specific international markets.
FNB AdvisorShares Restaurant EATZ
This ETF is active and does not track a benchmark. It gives exposure to companies that derive at least 50% of their net income from catering.
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Abercrombie & Fitch Company (ANF): Free Stock Analysis Report
The Aarons Company, Inc. (AAN): Free Stock Analysis Report
Papa Johns International, Inc. (PZZA): Free Stock Analysis Report
Cheniere Energy Partners, LP (CQP): Free Stock Analysis Report
SPDR S&P Retail ETF (XRT): ETF Research Reports
VanEck Vectors Semiconductor ETF (SMH): ETF Research Reports
US Gasoline ETF (UGA): ETF Research Reports
AdvisorShares Restaurant ETF (EATZ): ETF Research Reports
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