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Retail’s Best Holiday Season in 6 Years Boosts Leveraged Retail ETF

This article was originally published on ETFTrends.com.

Retailers are having their best holiday season in six years, which helped to boost the Direxion Daily Retail Bull 3X ETF (RETL) , which gained over 17 percent on Wednesday.

U.S. sales from Nov. 1 through Christmas Eve have risen by 5.1 percent to over $850 billion based on the latest numbers from Mastercard SpendingPulse, which tracks spending in brick-and-mortar stores as well as online stores. Online sales were also up 19.1 percent versus a year ago.

"From shopping aisles to online carts, consumer confidence translated into holiday cheer for retail,” Steve Sadove, senior adviser for Mastercard, said in a statement. “By combining the right inventory with the right mix of online versus in-store, many retailers were able to give consumers what they wanted via the right shopping channels.”

The latest data coincides with online sales reaching $110.6 billion five days prior to Christmas, which represented an 18 percent bounce from a year ago. Adobe Analytics is predicting that online holiday sales should reach the $126 billion mark.

RETL seeks daily investment results equal to 300% of the daily performance of the S&P Retail Select Industry Index. The index is a modified equal-weighted index that is designed to measure performance of the stocks comprising the S&P Total Market Index that are classified in the Global Industry Classification Standard (GICS) retail sub-industry.

The rise comes as the Dow Jones Industrial Average gained over 500 points following a 653-point drop on Monday, the day before Christmas. The Dow rallied over 200 points early, lost its gain and then surged again in a volatile Wednesday session—a recurring theme lately in the stock market.

Retailers might get another boost by holiday shoppers taking advantage of after-Christmas sales. The National Retail Federation reported that 50 percent of the day-after-Christmas shoppers will be taking to brick-and-mortar stores to do their shopping, while another 45 percent will go online.

Another 27 percent plan to use their gift cards received on Christmas, which should also help boost retail ETFs like RETL.

“Having made their lists and checked them twice, holiday shoppers have been out in full force these last few weeks, but many are still waiting to complete their shopping this weekend,” NRF President and CEO Matthew Shay said. “Retailers will use every opportunity to see that shoppers have a great experience in these final few days. Whether looking for competitive prices, festive in-store events or last-minute online shipping deals, retailers are ready to deliver.”

For more market trends, visit ETF Trends.

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