The coronavirus might be upending the major stock market indexes with heavy shots of volatility, but it doesn’t seem to be bothering the retail sector. According to the National Retail Federation, retail sales will grow to roughly $3.9 trillion this year or between 3.5% and 4.1% amid the economic uncertainty surrounding the coronavirus.
2020 retail sales should hit $3.93 trillion and $3.95 trillion, with online sales expected to grow between 12% and 15% to between $870.6 billion and $893.9 billion.
“The nation’s record-long economic expansion is continuing, and consumers remain the drivers of that expansion,” said NRF President and CEO Matthew Shay. “With gains in household income and wealth, lower interest rates and strong consumer confidence, we expect another healthy year ahead. There are always wild cards we cannot control like coronavirus and a politically charged election year. But when it comes to the fundamentals, our economy is sound and consumers continue to lead the way.”
For the past six months, retail has been on an upswing as seen in the MSCI USA Retailing Index before the coronavirus outbreak threw a speed bump in most sectors. Bullish retail investors hope this is a minor blip on the radar screen.
^MSACWIR data by YCharts
For traders looking for retail trade, they can opt for the following funds:
- SPDR S&P Retail ETF (NYSEArca: XRT): seeks to provide investment results that correspond generally to the total return performance of an index derived from the retail segment of a U.S. total market composite index. The index represents the retail segment of the S&P Total Market Index (“S&P TMI”).
- Amplify Online Retail ETF (NasdaqGM: IBUY): seeks investment results that generally correspond to the price and yield of the EQM Online Retail Index. The index seeks to measure the performance of global equity securities of publicly traded companies with significant revenue from the online retail business. The index methodology is designed to result in a portfolio that has the potential for capital appreciation.
For a different route, for ETF investors looking to capitalize on the wave of disruption in various industries, including retail, they should take a look at the GraniteShares XOUT U.S. Large Cap ETF (NYSEArca: XOUT). The ETF essentially takes the S&P 500 and trims the unnecessary fat—what’s left are companies that aren’t averse to disruption and are constantly innovating to stay ahead of the times.
XOUT data by YCharts
XOUT seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the XOUT U.S. Large Cap Index. The fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets (exclusive of collateral held from securities lending) in the securities included in the index.
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