Latest news with #XLY
Globe and Mail
6 days ago
- Business
- Globe and Mail
1 ETF to Buy Hand Over Fist to Follow the TACO Trade
In recent weeks, the phrase 'TACO' has been circulating in financial circles. No, investors are not talking about the Mexican delicacy. 'TACO' is actually an acronym for 'Trump Always Chickens Out,' a phrase coined by Financial Times columnist Robert Armstrong. According to Armstrong, many investors are using 'TACO' as a strategy. With the assumption that Trump will reverse course on tariffs (or 'chicken out'), they buy into the market each time new tariffs are announced. They are betting that stocks will rally if he later changes his stance on a particular levy. Utilizing this strategy, analysts at Sevens Report have made the case for a number of ETFs that can be an attractive trade for investors. One among them is the Consumer Discretionary Select Sector SPDR Fund (XLY). About the Consumer Discretionary Select Sector SPDR Fund Managed by State Street Global Advisors, the Consumer Discretionary Select Sector SPDR Fund (XLY) is an exchange-traded fund that offers investors exposure to U.S. consumer discretionary companies. These encompass industries such as retail, automobiles, media, hotels, restaurants, and leisure. The ETF is up 6.9% on a monthly basis while offering a dividend yield of 1.01% and charging an expense ratio of 0.08%, or $8 on an initial $10,000 investment. With assets under management (AUM) of $21.6 billion, XLY is the largest U.S.-listed ETF focused on the consumer discretionary sector. Its top five holdings are Amazon (AMZN), Tesla (TSLA), Home Depot (HD), Booking Holdings (BKNG), and McDonald's (MCD). Why the XLY ETF Fits in the TACO Trade But why are analysts at Sevens Report bullish about XLY? For starters, XLY stands out due to its significantly higher trading activity compared to peer ETFs like the Consumer Discretionary MSCI ETF (FDIS) and Vanguard's Consumer Discretionary ETF (VCR). This liquidity advantage makes XLY a more attractive option for traders. In general, the consumer discretionary sector has also shown strong momentum, recovering in late May after the U.S. and China announced a 90-day pause on most reciprocal tariffs. Finally, despite ongoing macroeconomic challenges, the latest reading of the U.S. Consumer Confidence Index from The Conference Board reached 98, a sharp increase from April's 85.7. This 12.3-point rise represents the largest monthly improvement since 2009 and ends a streak of five consecutive monthly declines. Moreover, the Present Situation Index advanced by 4.8 points to 135.9, signaling better evaluations of current business and labor market conditions. Such improvements are positive indicators for the consumer discretionary sector, as confident consumers are more likely to increase spending on non-essential items like retail goods, entertainment, travel, and dining experiences.
Yahoo
02-06-2025
- Business
- Yahoo
Should You Invest in the Consumer Discretionary Select Sector SPDR ETF (XLY)?
The Consumer Discretionary Select Sector SPDR ETF (XLY) was launched on 12/16/1998, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Broad segment of the equity market. While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency. Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%. The fund is sponsored by State Street Global Advisors. It has amassed assets over $21.51 billion, making it the largest ETF attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. XLY seeks to match the performance of the Consumer Discretionary Select Sector Index before fees and expenses. The Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index. When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal. Annual operating expenses for this ETF are 0.08%, making it the least expensive product in the space. It has a 12-month trailing dividend yield of 0.83%. While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis. This ETF has heaviest allocation in the Consumer Discretionary sector--about 100% of the portfolio. Looking at individual holdings, Inc (AMZN) accounts for about 21.63% of total assets, followed by Tesla Inc (TSLA) and Home Depot Inc (HD). The top 10 holdings account for about 68.57% of total assets under management. The ETF has lost about -4.46% so far this year and it's up approximately 23.19% in the last one year (as of 06/02/2025). In that past 52-week period, it has traded between $170.05 and $239.43. The ETF has a beta of 1.22 and standard deviation of 24.03% for the trailing three-year period, making it a medium risk choice in the space. With about 54 holdings, it effectively diversifies company-specific risk. Consumer Discretionary Select Sector SPDR ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, XLY is a sufficient option for those seeking exposure to the Consumer Discretionary ETFs area of the market. Investors might also want to consider some other ETF options in the space. IShares U.S. Home Construction ETF (ITB) tracks Dow Jones U.S. Select Home Construction Index and the Vanguard Consumer Discretionary ETF (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index. IShares U.S. Home Construction ETF has $2.15 billion in assets, Vanguard Consumer Discretionary ETF has $5.82 billion. ITB has an expense ratio of 0.39% and VCR charges 0.09%. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports Inc. (AMZN) : Free Stock Analysis Report The Home Depot, Inc. (HD) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report iShares U.S. Home Construction ETF (ITB): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
14-05-2025
- Business
- Yahoo
Stock Market News for May 14, 2025
U.S. stocks closed mostly higher on Tuesday, with the S&P 500 bouncing back to positive territory for the year after fresh data hinted at cooling inflation, adding to investor optimism a day after the United States and China reached a trade deal. However, the Dow ended in the red. The Dow Jones Industrial Average (DJI) slid 0.6% or 269.67 points, to finish at 42,140.43 points, a day after recording its highest close since March 26. The S&P 500 jumped 0.7% or 42.36 points to close at 5,886.55 points, erasing all its losses for the year and entering positive territory. Consumer discretionary and tech stocks were the biggest gainers. The Consumer Discretionary Select Sector SPDR (XLY) gained 1.3%, while the Technology Select Sector SPDR (XLK) jumped 2.2%. However, the Healthcare Select Sector SPDR (XLV) fell 3%. Six of the 11 sectors of the benchmark index ended in positive territory. The tech-heavy Nasdaq rose 1.6% or 301.74 points, to end at 19,010.19 points. The fear-gauge CBOE Volatility Index (VIX) was down 0.92% to 18.22. Advancers outnumbered decliners on the NYSE by a 1.86-to-1 ratio. On Nasdaq, a 1.36-to-1 ratio favored advancing issues. A total of 17.81 billion shares were traded on Tuesday, higher than the last 20-session average of 16.51 billion. Stocks rallied Monday after the United States and China announced a trade truce. The upbeat sentiment continued on Tuesday, as fresh data hinted at cooling inflation. The Labor Department said that the consumer price index (CPI) rose 0.2% sequentially in April and 2.3% from year-ago levels, the lowest since February 2021. The monthly reading came in line with expectations, while the 12-month was slightly below the consensus estimate. Core CPI, which excludes the volatile food and energy prices, also rose 0.2% month over month in April, lower than the forecast of 0.3%. Year over year, core CPI grew 2.8%, which came in line with analysts' expectations. The softer-than-expected inflation reading added to the investors' optimism, fueling the last session's rally. Tech stocks rallied once again on Tuesday. Shares of NVIDIA Corporation (NVDA) jumped 5.6% on news that the chipmaker will send 18,000 of its best AI chips to Saudi Arabia. NVIDIA carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Tuesday's gains saw the S&P 500 bounce back into positive territory for the year, just over a month after the index entered correction territory following the announcement of Trump's Liberation Day tariffs that rattled Wall Street. However, the Dow was dragged down by UnitedHealth Group Incorporated (UNH). The insurance bellwether's shares plummeted 17.8% after the company suspended its annual forecast and its CEO resigned. The market rally resumed on Monday after the United States and China agreed to pause tariffs for 90 days over the weekend. The United States said that it will slash tariffs to 30% on Chinese imports from 145%, while China will cut tariffs on U.S imports to 10% from 125%. Investors believe the Federal Reserve will resume its rate cuts not before September but are hopeful about two 25 basis point rate cuts this year as inflation is cooling steadily and is on track to meet the central bank's 2% target. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
13-05-2025
- Business
- Yahoo
Stock Market News for May 13, 2025
U.S. stocks rallied on Monday after the United States and China agreed to temporarily slash tariffs for 90 days following negotiations over the weekend, easing fears of a global trade war and raising hopes that the economy won't slip into a recession. All the major indexes ended in positive territory. The Dow Jones Industrial Average (DJI) jumped 2.8%% or 1,160.72 points, to close at 42,410.10 points, its highest close since March 26. The S&P 500 rallied 3.3% or 184.28 points to end at 5,844.19 points, its biggest close since March 3. Consumer discretionary, tech and industrial stocks were the biggest gainers. The Consumer Discretionary Select Sector SPDR (XLY) jumped 5%, while the Technology Select Sector SPDR (XLK) climbed 4.6%. The Industrials Select Sector SPDR (XLI) added 3.1%. Ten of the 11 sectors of the benchmark index ended in positive territory. The tech-heavy Nasdaq climbed 4.4% or 779.43 points, to finish at 18,708.34 points. The fear-gauge CBOE Volatility Index (VIX) was down 16.03% to 18.39. Advancers outnumbered decliners on the NYSE by a 2.83-to-1 ratio. On Nasdaq, a 2.84-to-1 ratio favored advancing issues. A total of 20.20 billion shares were traded on Monday, higher than the last 20-session average of 16.52 billion. Stocks rallied on Monday after the United States and China agreed to a trade deal following talks in Switzerland over the weekend. Both countries agreed to slash the stiff tariffs imposed on each other for 90 days. The United States said that it will slash tariffs to 30% on Chinese imports from 145%, while China will cut tariffs on U.S imports to 10% from 125%. Investors felt a bit relieved and turned their focus once again to riskier bets from more defensive assets. Stocks with strong connections to China rallied, with shares of Tesla, Inc. (TSLA) and Apple, Inc. (AAPL) jumping 6.8% and 6.3%, respectively. Shares of NVIDIA Corporation (NVDA) gained 5.4%. NVDA carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Tech stocks were the biggest gainers on Monday, with all three major indexes recording their best day since April 9. U.S. stocks have been suffering since Trump announced sweeping tariffs on April 2. While the President imposed a baseline 10% tariff on all trading partners of the United States, he announced 145% tariffs on Chinese imports. In retaliation, China slapped a 125% tariff on all U.S. imports. However, Trump has since paused tariffs for 90 days for all countries except China. Since then, stocks have recovered and regained most of their lost ground. Investors are now hopeful that more trade deals will be reached with other countries in the coming days. They are also expecting the Federal Reserve to resume rate cuts in September. The consumer price index (CPI), which will be out on Tuesday, will give a clearer picture of this. No major economic data was released on Monday. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-05-2025
- Business
- Yahoo
This week's insight into the state of the consumer: What to know
Consumers remain in decent financial shape heading into a big week for data. Market Domination co-host Josh Lipton joins Wealth anchor Brad Smith to break down what investors can expect from Walmart (WMT) earnings, April retail sales, and consumer sentiment reports. To watch more expert insights and analysis on the latest market action, check out more Wealth here. We're set to get a fresh look at the state of the consumer this week. Yahoo Finance's Josh Lipton is here with us now on more on what we can expect here, Josh. What are we watching for? That's right, Brad. So, investors, we know, always eager for more insight into the health and resilience of the American consumer and this week, they will get more important data on that front, including Walmart's first quarter earnings, we've got retail sales and University of Michigan Consumer Sentiment. So, what has been the state of the consumer as we head now into these reports? Well, the Bank of America Institute says consumers continue to show moderate spending momentum with most being in good financial health. April card spending per household was up 1% year over year, that follows a 1.1% rise in March, according to Bank of America aggregated credit and debit card data. They say the financial position of most consumers appears sound. Now, check out the XLY, that's the consumer discretionary ETF. It is down about 5% this year, but it's up around 20% now from that April 8th low. The Tulsi Advisory Group, a consulting brokerage firm focused on the consumer sector, says a barbell approach to the consumer does make sense, given that lower to middle income consumers face more challenges and will need to stretch their dollars and spending on basics, while the upper income consumer, they argue, has the means to continue spending on goods and services. In the apparel and footwear category, they are fans of Birkenstock. As for consumer technology plays, it's Amazon and Warby Parker. For department stores, Burlington, and among the discounters and supermarkets, they tell their clients Costco and Walmart remain top picks, Brad. All right, we're going to be watching for this closely here. Thanks so much for lining this up for us. Got it.
