Tag Archive | XLY

Four ETFs Influenced By McDonalds

The world’s largest restaurant chain, McDonald’s Corp. (MCD) reported increases in revenues and net income for the fourth quarter, meeting analyst expectations and giving support to the Consumer Discret Select Sector SPDR (XLY), the iShares Dow Jones US Consumer Services (IYC), the Vanguard Consumer Discretionary (VCR) and the PowerShares Dynamic Food & Beverage (PBJ). 

Revenues for the Oak Brook, Ill-based company jumped 4 percent to $6.21 billion, of which $4.2 billion were generated through company-operated restaurants and nearly $2 billion from franchise-operated restaurants.    Furthermore, total operating income grew by 5 percent from the prior-year quarter to $1.16 per share helping push earning year over year up nearly 6 percent.    Read More…

Three ETFs Impacted By US-South Korea Trade Agreement

The United States and South Korea agreed to modify a free-trade agreement, which, upon execution, will be the largest value of trade volume in the world since the North American Free Trade Agreement (NAFTA) paving the path to opportunity for the iShares MSCI South Korea Index (EWY), the Consumer Discretionary Select Sector SPDR (XLY) and the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (COW).

More specifically, the amendments to the trade agreement includes new steps to open up South Korea’s auto market to US producers by enabling 25,000 vehicles to enter South Korea based on US safety standards.   Furthermore, the United States is allowed to keep a 2.5% tariff on Korean-built cars for five more years, which will eventually be cut, and a 25 percent tariff on trucks until the eight year and eliminate the duty in the tenth year of the pact.    Read More…

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…

Four Fast Food ETFs That Are Tasty

Despite a rollercoaster ride in the stock market and uncertainty in the overall strength of the global economic recovery, some fast food stocks and exchange traded funds (ETFs) that hold them remain attractive.

First off, as long as the unemployment rate remains north of 9% and employers remain cautious about hiring, consumers will continue to seek discount alternatives, and when it comes to eating, fast food joints will likely be the benefactors of this trend. 

One such fast food chain positioned to reap the benefits of consumer’s penny pinching is McDonalds (MCD).  The Oak Brook, Illinois-based fast food giant’s emphasis on value contributed to the burger chain reporting double-digit percentage growth in first-quarter revenue and earnings, highlighted by robust sales returning to the U.S.  In the U.S., earnings rose 11% and revenue increased 10%.  Similar trends were seen internationally, as McDonald’s global same-store sales rose 4.2%, with the Asia/Pacific, Middle East and Africa segment gaining 5.7% and Europe increasing by 5.2%. 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…

Retail ETFs May Have Muddy Path

By Kevin Grewal

The retail sector posted its third consecutive monthly sales gain as department stores posted sales revenues which beat analyst expectations; however, the road ahead still remains bumpy. 

Department store giant Macys Inc. (M) as well as discount store Target (TGT), both reaped the benefits of an increase in traffic and a jump in the average amount spent by consumers, pushing increases in sales by 4% and 2.4%, respectively.    Additionally, Wal-Mart (WMT) stated that it is expecting to pay back its investors by increasing its annual dividend by 11%. 

Increases in consumer spending, and hence retail sales, have been linked to an expected increase in average hourly earnings and average hours worked, giving a boost to disposable income.  Additionally, some sector experts suggest that an increase was inevitable due to such poor sales figures in the month before.  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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