Consumer ETFs Rise On Upbeat Confidence Data

ETF Database

Though Wall Street got off to a relatively rough start this week, investors welcomed several better-than-expected economic reports, which helped bolster U.S. equities. Durable goods orders for May rose 3.6% from April, beating expectations for a 3.2% uptick. The S&P Case-Shiller 20-City home price index also topped forecasts, rising 12.1% in April from a year earlier versus the expected 11.1% increase. Meanwhile, new home sales rose 2.1% to a seasonally adjusted 476,000. Adding to the list of upbeat reports, consumer confidence climbed to a record five-year high [see also Select Sector SPDR ETFs Head-To-Head]. 

Consumer Confidence Tops Expectations

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Consumer Confidence

The latest consumer confidence data, compiled by the Conference Board, came in at 81.41 for the month of June – the highest level seen in five years. Analysts had expected the index to rise only slightly to 75.2. The report also showed consumers having better views both of current conditions and the future.

In the previous recording, the CB Consumer Confidence Index also beat expectations, rising to 76.2 versus the forecasted 70.7.  Thus far in 2013, this key index was reported well above expectations in the last four of six readings [see Consumer ETFs: 3 Things To Consider].

Consider the trailing six-month consumer confidence data below and note the steep increase we have seen over the last three months. It is important, however, to note that this is a lagging indicator – meaning the index responds only after the overall economy has already changed, essentially confirming that a pattern is occurring:

Consumer ETFs Performance Recap

In addition to yesterday’s upbeat consumer confidence report, 2013 has seen a slew of encouraging economic data on the home front, leading investors and consumers alike to be more optimistic about the nation’s recovery. And with confidence on the rise, consumer discretionary equity ETFs have managed to keep up with the market’s quick pace.

Year-to-date, the Consumer Discretionary Select Sector SPDR (XLY, A) has gained roughly 15%, and over the trailing 1-year period, the fund has delivered a stellar 27.5% return [see Consumer Centric ETFdb Portfolio]:

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Disclosure: No positions at time of writing.

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