Tag Archive | PEZ

Four ETFs Driven By Consumer Spending

The US economy grew at a faster than expected rate in the third quarter of this year, buoyed much by an increase in consumer spending, however, is still not growing at a rate to generate new jobs.  Despite this, a ray of light may shine on sectors driven by consumer spending enabling the Consumer Discretionary Select Sector SPDR (XLY), the Vanguard Consumer Discretionary (VCR), the PowerShares Dynamic Consumer Discretionary (PEZ) and the Retail HOLDRs (RTH) to reap the benefits.

According to the Commerce Department, consumer spending, this accounts for nearly 70 percent of US GDP, increased by 2.4 percent annually during the third quarter of this year.  Furthermore, retail sales rose in each of the three months in the third quarter with a further detail indicating that this rise is broad based.  Read More…

3 Reasons Retailers May Face Uphill Battle

 Although many retailers reported first-quarter earnings results which beat Wall Street’s expectations, an ambiguous recovery in consumer spending and confidence will likely put a strain on near term growth and profitability.

On one hand, retail giant Target (TGT) recently announced that in the month May its same-store sales jumped 1.3%, a hair ahead of expectations and witnessed a rise in credit card sales, suggesting consumers are more willing to extend themselves.  On the other hand, clothing retailers, which are a good indicator of consumer discretionary spending, Abercrombie & Fitch (ANF) and Hot Topic (HOTT), reported sales that fell short of expectations.  Additionally, warehouse giant Costco Wholesale (COST) recently saw an uptick in sales of food, an essential item, and a decrease in the volume of televisions sold in May.  Read More…

Ford Has Bright Outlook

Recently, shares of Ford Motor Company (F) have hit their highest price in five years and there are plenty of indicators that suggest a bright outlook for the automaker lies ahead.

According to the latest Consumer Report rankings, Ford is the only U.S. auto manufacturer who has seen improved quality and surpassed Japanese automaker, Mitsubishi, on the reliability rankings list.  Additionally, recall-related problems that have hit the world’s largest automaker, Toyota Motor Company (TM), struggles by General Motors to get back on their feet, and the continuing woes that loom over Chrysler have enabled Ford to grab additional market share. 

Fundamentally speaking, Ford appears to be in good shape.  As the result of a restructured business model, the company is able to remain globally competitive and is boasting positive operating cash flows.  This model is supported by increased efficiency through a more disciplined approach toward production levels and incentives, new product offerings which focus on fuel efficiency and innovation and new UAW agreements which expand cost benefits.  Read More…

Ford Motor, A Hidden Treasure

By Kevin Grewal

In the last quarter, Ford Motor Company (F) swung to its first quarterly profit in the past five years and there are plenty of indicators that suggest a bright outlook for one of the first automakers in the United States.

From a fundamental perspective, things seem to be heading in the right direction for Ford.  The company remains competitive, has indicated positive operating cash flows and has boasted a 22% increase in revenues from a year ago.   Additionally, Ford was the only large U.S. automaker to make it through the global financial meltdown without reorganizing under a government-managed bankruptcy.

Ford is destined to gain market share at the expense of Toyota’s (TM) problems.  Toyota has suspended sales of eight of its top sellers and Ford produces several vehicles which are direct competitors to the recalled and suspended Toyotas.  Read More…

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