Or should it be Black Thursday? Some of the largest U.S.
retailers including Wal-Mart (NYSE:
), Target (NYSE:
) and properties owned by Sears Holding (NASDAQ:
) will open their doors to shoppers on Thanksgiving night.
Understandably, many employees are not fussed about having to
work on Thanksgiving, but some consumers will love the chance to
get an early start on the good deals that can often be had at
this time of year. To be sure, this is a critical holiday
shopping season for discretionary and retail stocks.
The fiscal cliff could be right around the corner and job
creation in the U.S. remains slack. Both scenarios could test
consumers' willingness to part with what cash they do have this
holiday season. On the other hand, it must be noted discretionary
have not only held up well this year,
these funds have been stellar performers
With that, these are the must know ETFs for the start of the
holiday shopping season.
Market Vectors Retail ETF (NYSE:
It is hard to understand why, but the Market Vectors Retail ETF
often goes overlooked in the discretionary/retail ETF
conversation. Ignorance of RTH has not been bliss this year as
the fund has surged 17.2 percent, but there is an issue investors
need to be aware of.
RTH is home to just 26 stocks and it is a top-heavy fund.
Wal-Mart, Home Depot (NYSE:
) and Amazon (NASDAQ:
) account for a third of RTH's weight. Some of the wind has been
taken out of RTH's sails as the fund has lost 4.7 percent in the
past month. If things go well on Black Friday and RTH can avoid
violating support at $42.50, the ETF could be a trade worth
taking soon and holding into the new year.
PowerShares S&P SmallCap Consumer Discretionary
PSCD is the small-cap equivalent of the Consumer Discretionary
Select Sector SDPR (NYSE:
). The focus on small caps does not mean PSCD offers up exposure
to unfamiliar stocks. What it does mean is that the ETF is more
volatile and it has proven as much recently.
Look at the charts of PSCD holdings such as Buffalo Wild Wings
), The Children's Place (NASDAQ:
), Jos. A Bank (NASDAQ:
) and Steve Madden (NASDAQ:
) to get a sense for just how volatile PSCD's constituents can
There are a couple of other traits that speak to increased
risk with PSCD. The ETF does not skimp on exposure to auto
retailers, one retail sub-sector that is out of favor with
investors right now. Second, the ETF holds about 10 restaurant
stocks, so with this fund it is not all about folks doing holiday
shopping. It is about shopping AND eating out after or during
SPDR S&P Retail ETF (NYSE:
When it comes to the SPDR S&P Retail ETF, this is an ETF that
needs some good cheer courtesy of Black Friday due to a
precarious technical position. If XRT falls below $60 on strong
volume, the fund could be in serious trouble and there is just no
getting around that.
Approximately 10 of XRT's 96 holdings are members of the
embattled auto retail sub-sector, but in the fund's favor is its
equal-weight approach. Even when stripping out auto names,
grocery store operators and the fund's largest holding Netflix
), XRT offers ample exposure to traditional retailers. In
addition, the fund does hold some higher end fare including
), Tiffany (NYSE:
) and Saks (NYSE:
Bottom line: XRT is a must watch Black Friday play and a
strong start to the holiday shopping season could determine this
ETF's near-term fate.
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