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The Fund will normally invest at least 90 percent of its net assets (including investment borrowings) in the securities that comprise the Index. The Fund, using an indexing investment approach, attempts to replicate, before fees and expenses, the performance of the Index. The Index is part of the StrataQuant Series, a family of custom enhanced indices developed, maintained and owned by ICE Data Indices, LLC or its affiliates (IDI or the Index Provider). The Index Provider reserves the right to, at any time, change the number of stocks comprising the Index by adding or deleting one or more stocks, or replacing one or more stocks contained in the Index with one or more substitute stocks of its choice, if in the Index Providers discretion, such addition, deletion or substitution is necessary or appropriate to maintain the quality and/or character of the Index.

D R Horton Inc

Lennar Corp. Class A

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Toll Brothers Inc

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Fox Corporation

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Spotify

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Dutch Bros Inc

Live Nation Entertainment Inc.

Aptiv Plc

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Liberty Media Formula One Corp C

Lear Corp.

Crocs, Inc

Gap Inc. (the)

United Continental Holdin

Ford Motor Co.

Delta Air Lines Inc.

Five Below Inc Common Stock Usd 0.01

ROBLOX Corp

Pvh Corp.

Dillard Inc

First Trust Consumer Discretionary AlphaDEX Fund

As geopolitical <a href="https://www.benzinga.com/topic/china">tensions between China and the U.S.</a> rise and viral videos on TikTok expose layers of luxury supply chains, investors are facing a new type of reckoning: brand dilution by exposure. While some luxury brands are gearing up to pass the cost on to affluent customers, others may be at risk of reputational damage and shifting consumer sentiment, particularly those with undisclosed connections to Chinese manufacturers.
For <a href="https://www.benzinga.com/etfs">luxury retail ETFs</a>, the narrative is no longer merely one of premium brand cachet. It&#8217;s one of origin transparency, tariff risk and the danger of counterfeit inundating mainstream markets.
<h2 class="wp-block-heading">3 Luxury Retail ETFs Under The Microscope</h2>
SPDR Select Sector Fund &#8211; Consumer Discretionary (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLY#NYSE">XLY</a>)
As one of the largest and most liquid ETFs in the space, XLY includes mega-cap names like Home Depot (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HD#NYSE">HD</a>) and Nike (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NKE#NYSE">NKE</a>). While not exclusive to luxury, it offers heavy exposure to branded discretionary spending. If consumer sentiment shifts against companies perceived as outsourcing to China or overcharging for imported goods, XLY could be vulnerable to sector-wide repricing.
As CNN notes, lots of luxury products are partially assembled in China and then receive final touches in Europe. 
Amplify Online Retail ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBUY#NYSE">IBUY</a>)
Targeting U.S. consumer and e-commerce platforms, IBUY features brands that are most exposed to the ascendance of wholesale Chinese apps such as DHgate and Taobao. <a href="https://edition.cnn.com/2025/04/16/business/chinese-manufacturers-tiktok-trade-war/index.html">According </a>to CNN, the platforms are now dominating app store rankings in the U.S., offering ultra-low-cost facsimiles that impersonate (or purport to be) OEMs for luxury brands such as Gucci, Prada and even Birkin.
Wang Sen, a TikTok personality who stated he was an OEM for high-end handbags, was caught on camera facing a wall full of what appeared to be Birkin bags. In a now-deleted video, he asked viewers to reach out and purchase directly from them, as reported by CNN. Real or not, the effect is the same: IBUY constituents are being competed against by direct-from-factory sellers encroaching on their territory.
First Trust Consumer Discretionary AlphaDEX Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXD#NYSE">FXD</a>)
This ETF comprises high-end U.S. consumer brands like Ralph Lauren&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RL#NYSE">RL</a>) and Nike – companies often <a href="https://www.fibre2fashion.com/news/industrial-textiles-news/viral-tiktok-videos-promote-chinese-factory-buys-to-dodge-us-tariffs-302029-newsdetails.htm?amp=true">cited </a>in viral videos as sending manufacturing offshore to China. If sales of these companies take a hit as consumers shift to direct purchasing, this fund is likely to feel the pain.
Also Read: <a href="https://www.benzinga.com/25/04/44870375/blackrock-debuts-first-3-capped-sp-500-etf-to-tame-mega-cap-dominance">BlackRock Debuts First 3% Capped S&amp;P 500 ETF To Tame Mega-Cap Dominance</a>
<h2 class="wp-block-heading">The TikTok Trade War</h2>
What&#8217;s behind this viral content bonanza is more than transparency—there&#8217;s a larger trade war narrative. In a new twist on U.S.-China tensions, CNN explains that Chinese influencers are flooding TikTok to pressure Americans to bypass Trump&#8217;s 145% tariffs by purchasing directly from Chinese manufacturers. One video purporting to document the suppliers of Lululemon leggings has over 1.5 million likes. In comments? &#8220;Now this is how you do a trade war.&#8221;
Apps such as Taobao and DHgate, notorious for carrying &#8220;dupes,&#8221; burst into the U.S. App Store&#8217;s top 10 this month. Even if they are not selling original OEM products, they still undercut the prestige and price power of luxury brands.
A popular video cited by the outlet showed a user saying Lululemon&#8217;s $98 leggings were purchased for $5–$6 from a factory in Yiwu. Lululemon quickly dismissed any connection to those manufacturers, stating the names does not appear on its formal 2025 list of suppliers.
Luxury groups, however, are adapting. French luxury brand Hermès indicated that it would pass the total cost of US tariffs to buyers, according to Reuters. The French luxury group, known for its Birkin and Kelly handbags, which sell for $10,000 or more, generated a 7% year-over-year increase in Q1 revenues on a constant currency basis, falling short of the almost 10% surge that analysts had estimated, according to HSBC data cited by Reuters.
Hermès can count on its high-end clientele to swallow higher prices, but not everyone in the industry enjoys such pricing power. LVMH, a bellwether, saw a 5% decline in its fashion and leather segment.
The Illusion Of Reshoring
While the Trump administration is counting on tariffs to restore manufacturing to U.S. shores, the situation is more complicated. A recently released CNBC Supply Chain Survey revealed that 74% of firms identify cost as the main obstacle preventing them from reshoring. Few are contemplating returning to America. Most prefer to move to other low-tariff nations such as Vietnam and Cambodia.
This implies that ETFs with U.S. luxury and consumer brand exposure will continue to be tied to impenetrable global supply chains—most of which are still routed through China.
Final Word For Investors
For investors in ETFs, the actual concern might not be where things are produced, but whether companies are honest about it. The viral TikTok clips, grounded in reality or not, have highlighted a building consumer desire for authenticity in labeling and sourcing.
High-end brands that fail to satisfy this expectation can risk more than just their reputations. They stand to lose their price power, their exclusivity, and ultimately, their appeal to investors.
Read Next: 
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<li><a href="https://www.benzinga.com/etfs/new-etfs/25/04/44866215/exclusive-defiance-letting-you-go-2x-long-on-quantum-2x-short-on-ai-straight-from-the-ceo">EXCLUSIVE: Why Defiance Is Letting You Go 2X Long On Quantum, And 2X Short On AI, Straight From The CEO</a></li>
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Select Sector SPDR-Consumer Discretionary

The $10K Handbag Hoax? TikTok's Trade War Puts Luxury ETFs In The Hot Seat

PVH Corp.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PVH#NYSE">PVH</a>) shares are trading lower after the company reported&nbsp;third-quarter&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/12/b42329586/pvh-corp-reports-2024-third-quarter-revenue-and-earnings-above-guidance" rel="noreferrer noopener">results and provided soft guidance</a>.
Sales came in at&nbsp;$2.255 billion, which beat the analyst consensus estimate of $2.220 billion.
Revenue in the company&#8217;s international businesses was flat year over year and down 2% on a constant currency basis.
Growth in the Asia Pacific region in local currency was offset by a strategic reduction in sales in Europe, aimed at driving higher-quality sales in the region.
In North America, revenue from the Tommy Hilfiger and Calvin Klein brands decreased by 6% year over year, partly due to a shift in wholesale shipments from the fourth quarter to the third quarter of the prior year.
Direct-to-consumer revenue was flat Y/Y (-1% Y/Y in constant currency).
Owned store revenue increased 1% year over year, while digital commerce revenue decreased 1% year over year (-3% year over year in constant currency), impacted by the strategic sales reduction in Europe.
Wholesale revenue declined 8% year over year (-9% year over year in constant currency), with a 4% year-over-year drop from the sale of the Heritage Brands women&#8217;s intimates business and the rest due to the reduction in Europe sales and North American shipment timing.
Gross margin improved by 170 basis points year over year to 58.4%, led by a favorable shift in channel mix and reduced sales to lower-margin wholesale accounts.
Adjusted EPS of $3.03&nbsp;per share, which beat the <a target="_blank" href="https://www.benzinga.com/earnings" rel="noreferrer noopener">analyst consensus estimate of&nbsp;$2.59</a>.
Stefan Larsson, Chief Executive Officer, said, "Throughout the quarter, we drove powerful consumer engagement for both Calvin Klein and TOMMY HILFIGER, and continued to build momentum in product, with significantly improved sell-throughs for the Fall 24 season across all regions and both our iconic brands, and we are coming into the holiday season with a fresh and strong inventory composition."
Buyback: Under the PVH+ Plan, the company repurchased shares worth $29 million in the third quarter of 2024, bringing total repurchases for the first nine months to 2.4 million shares for $254 million.
The company expects to repurchase around $400 million in common stock for 2024.
Outlook:&nbsp;PVH expects&nbsp;fourth-quarter&nbsp;revenue to decrease by&nbsp;6%&nbsp;to&nbsp;7%&nbsp;and sees adjusted EPS of $3.05 to<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener"> $3.20 vs. estimate of $3.71</a>.
The company reaffirmed the fiscal year 2024 revenue decrease of&nbsp;6%&nbsp;to&nbsp;7%&nbsp;and revised adjusted EPS to&nbsp;$11.55-$11.70 (from&nbsp;$11.55-$11.80)<a target="_blank" href="https://www.benzinga.com//node/40589325" rel="noreferrer noopener"> versus the estimate of&nbsp;$11.73</a>.
Investors can gain exposure to the stock via First Trust Cons. Discret. AlphaDEX (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXD#NYSE">FXD</a>) and First Trust Mid Cap Value AlphaDEX Fund (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FNK#NASDAQ">FNK</a>).
Price Action: PVH shares are down 2.5% at $109.98 at last check Thursday.
Read Also:
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<li><a href="https://www.benzinga.com/economics/macro-economic-events/24/12/42323280/tech-stocks-extend-record-highs-on-ai-optimism-marvell-rockets-bitcoin-hovers-near-95000-whats-driving-markets-wednesday" target="_blank" rel="noreferrer noopener">Tech Stocks Extend Record Highs On AI Optimism, Marvell Rockets, Bitcoin Hovers Near $95,000: What&#8217;s Driving Markets Wednesday?</a></li>
</ul>
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Calvin Klein Parent PVH Falls As Q3 Beats Are Derailed By Soft Guidance

Americans are feeling optimistic about the economy given stabilizing inflation and shifting election sentiments. This is especially true as consumer sentiment rose in early August for the first time in five months. Rising consumer sentiment bodes well for household spending in the coming months. It is expected to have a positive impact on the consumer discretionary sector, which attracts a major portion of consumer spending.
Investors can tap the encouraging trend in the basket form through consumer discretionary ETFs like Consumer Discretionary Select Sector SPDR Fund (ARCA:XLY), Vanguard Consumer Discretionary ETF (ARCA:VCR), Fidelity MSCI Consumer Discretionary Index ETF (ARCA:FDIS), First Trust Consumer Discretionary AlphaDEX Fund (ARCA:FXD) and iShares U.S. Consumer Services ETF (ARCA:IYC). These funds have a Zacks ETF Rank #3 (Hold).
The latest University of Michigan consumer sentiment index climbed from 66.4 in July to 67.8, marking the highest reading of consumer sentiment since June. This has sparked strong optimism surrounding the economy and the stock market, which eased concerns about a cooling labor market in early August.
According to the survey, inflation expectations remained stable at 2.9% over the next year and 3% over the next five to 10 years. Consumers&#39; expectations of inflation over the next year remain at their lowest level since December 2020.
Most of the rise in confidence came from presidential election developments. Sentiment for Democrats rose 6% as Vice President Kamala Harris gained ground in public polling while sentiment for Republicans fell 5%. The survey showed that 41% of consumers believe Harris is the better candidate for the economy, while 38% said Trump is better.
Consumer Discretionary Select Sector SPDR Fund
Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space and tracks the Consumer Discretionary Select Sector Index. It holds 52 securities in its basket, with key holdings in specialty retail, hotels, restaurants and leisure, broadline retail, and automobiles with a double-digit allocation each.
Consumer Discretionary Select Sector SPDR Fund is the largest and most popular product in this space, with AUM of $18.6 billion and an average daily volume of around 3 million shares. It charges 0.09% in expense ratio.
Vanguard Consumer Discretionary ETF
Vanguard Consumer Discretionary ETF follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index and holds 302 stocks in its basket. In terms of industrial exposure, broadline retail, automobile manufacturers and restaurants occupy the top three spots.
Vanguard Consumer Discretionary ETF is the low-cost choice in the space, charging investors only 10 bps in annual fees while volume is good at nearly 61,000 shares a day. The fund has managed $5.4 billion in its asset base so far.
Fidelity MSCI Consumer Discretionary Index ETF
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index, holding 274 stocks in its basket. It has key holdings in broadline retail, specialty retail, hotels, restaurants and leisure, and automobiles.
Fidelity MSCI Consumer Discretionary Index ETF has amassed $1.6 billion in its asset base while trading in a good volume of around 137,000 shares a day on average. It charges 8 bps in annual fees from investors.
First Trust Consumer Discretionary AlphaDEX Fund
First Trust Consumer Discretionary AlphaDEX Fund follows an AlphaDEX methodology and ranks stocks in the space by various growth and value factors, eliminating the bottom-ranked 25% of the stocks. This approach results in a basket of 120 stocks with retailers, travel and leisure, media&nbsp;&nbsp;&nbsp; and personal goods taking double-digit exposure each.
First Trust Consumer Discretionary AlphaDEX has an AUM of $1.5 billion and trades in a volume of 47,000 shares per day on average. It charges a higher 61 bps in annual fees.
iShares U.S. Consumer Services ETF
iShares U.S. Consumer Discretionary ETF offers exposure to U.S. companies that distribute food, drugs, general retail items and media by tracking the Russell 1000 Consumer Disc 40 Act 15/22.5 Daily Capped Index. It holds 176 stocks in its basket, with key holdings in consumer discretionary, consumer services, media &amp; entertainment, consumer staples distribution &amp; retail, and autos &amp; components.
iShares U.S. Consumer Discretionary ETF has amassed $1 billion in its asset base and trades in a moderate volume of 123,000 shares a day on average. It charges 40 bps in annual fees from investors.
<a href="https://www.zacks.com/stock/news/2324514/etfs-to-tap-as-consumer-sentiment-improves?cid=CS-BENZ-FT-etf_news_and_commentary-2324514">To read this article on Zacks.com click here.</a>

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ETFs to Tap as Consumer Sentiment Improves

Skechers USA Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SKX#NYSE">SKX</a>) has filed a lawsuit against LL Bean accusing the company of <a href="https://www.benzinga.com/topic/apparel">illegally copying its shoe designs</a>.
The shoe company filed the complaint in Manhattan federal court. It alleges that LL Bean&#8217;s Freeport casual shoes infringe on two patented designs for &#8220;heel cups&#8221; that surround the back of the foot.
Skechers claims these designs are &#8220;unique and eye-catching&#8221; with &#8220;graceful, sweeping, gently rolling lines and slopes.&#8221;
Skechers asserts that LL Bean entered the market with its infringing shoe only after Skechers had invested significantly in developing and promoting its designs, which have gained broad appeal, reported Reuters.
The lawsuit seeks unspecified damages, including triple damages, if there was any willful infringement. It aims to halt the sales of the allegedly infringing shoes.
Also Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/07/39715669/footwear-stocks-poised-for-strong-q2-bofa-analyst-sees-attractive-upside-for-crocs-">Footwear Stocks Poised for Strong Q2: BofA Analyst Sees Attractive Upside for Crocs and Skechers</a>
The lawsuit comes at a time when many Americans are curbing discretionary spending due to inflation concerns. LL Bean&#8217;s Freeport shoes, named after the company&#8217;s Maine hometown, are sold for $99 on their website. 
LL Bean, a privately held company founded in 1912, has yet to comment on the lawsuit. Skechers, founded in 1992 and based in Manhattan Beach, California, did not immediately respond to requests for comment.
The outcome of this legal battle could impact how the footwear industry handles design patents and market entry strategies.
Skechers stock has gained more than 26% in the last 12 months. Investors can gain exposure to the stock via First Trust Consumer Discretionary AlphaDEX Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXD#NYSE">FXD</a>) and Invesco S&amp;P Midcap Momentum ETF (MYSE:XMMO).
Price Action: SKX shares are trading higher by 1.32% at $66.96 at last check Tuesday.
Read Next: 
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</ul>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Skechers Sues LL Bean, Alleges Shoe Design Infringement

Live Nation Entertainment Inc&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LYV#NYSE">LYV</a>) shares are trading lower on Thursday as the company faces a legal challenge after the U.S. Department of Justice and several states prepare to file an antitrust lawsuit against the entertainment giant over its control of concert ticket sales.
According to&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-05-22/justice-department-to-seek-breakup-of-live-nation-ticketmaster?sref=TBDibEcD" rel="noreferrer noopener">Bloomberg</a>, the case, which is expected to be filed in the Southern District of New York on Thursday, could lead to the company&#8217;s breakup.
The lawsuit targets Live Nation&#8217;s&nbsp;<a target="_blank" href="https://www.benzinga.com/general/entertainment/24/05/38680805/live-nation-fights-back-against-monopoly-claims-will-the-bad-blood-continue" rel="noreferrer noopener">dominance in the ticketing market</a>&nbsp;through its subsidiary&nbsp;<a target="_blank" href="https://www.benzinga.com/general/entertainment/24/05/38680805/live-nation-fights-back-against-monopoly-claims-will-the-bad-blood-continue" rel="noreferrer noopener">Ticketmaster</a>.
This lawsuit is part of the Biden administration&#8217;s broader strategy to tackle monopolistic practices in various industries.
The Justice Department has already initiated legal actions against tech giants like&nbsp;Alphabet Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) and&nbsp;Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), while the Federal Trade Commission is pushing for Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>). to divest its Instagram and WhatsApp units and has sued&nbsp;Amazon.com Inc.&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) for monopolistic practices in the online marketplace.
Following the news of the impending lawsuit, Live Nation&#8217;s shares fell, highlighting investor concerns over the potential outcomes of the legal action.
Live Nation, the largest concert promoter in the United States, merged with Ticketmaster in 2010. The merger was initially approved under the Obama administration with conditions&nbsp;designed&nbsp;to prevent anticompetitive practices.
However, under the Trump administration, the Justice Department found that Live Nation had violated these conditions, leading to a modified settlement in 2019 that included the appointment of an external monitor to oversee compliance.
The Biden administration launched a new investigation into Live Nation in 2022, prompted by ongoing concerns about the company&#8217;s adherence to the settlement terms.
Public interest in the case surged after Ticketmaster struggled to handle the overwhelming demand for&nbsp;<a target="_blank" href="https://www.benzinga.com/general/entertainment/24/04/38276776/department-of-justice-may-echo-taylor-swifts-look-what-you-made-me-do-in-case-against-ticke" rel="noreferrer noopener">Taylor Swift concert tickets later that year</a>, bringing further scrutiny to Live Nation&#8217;s practices.
Live Nation stock has gained more than 23% in the last 12 months. Investors can gain exposure to the stock via&nbsp;Invesco S&amp;P 500 Pure Growth ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RPG#NYSE">RPG</a>) and&nbsp;First Trust Consumer Discretionary AlphaDEX Fund&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FXD#NYSE">FXD</a>).
Price Action: LYV shares are trading lower by 6.11% at $95.20 in the premarket at the last check on Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Why Ticketmaster Owner Live Nation's Shares Are Tumbling Today

Matt Boss, JPMorgan's retail analyst, was a guest on <a href="http://video.cnbc.com/gallery/?video=3000567097">CNBC</a> Thursday afternoon to offer his take on the state of the retail market. The analyst quickly pointed out that the retail sector has now lapsed the most worrying week of the year with the U.S. election.
"There is no question that some of this uncertainty held the consumer back in the third quarter &mdash; it's hard to parse through the noise," he said. "We had really bad weather in the third quarter, it was much warmer year-over-year so that was an aspect for a lot of the apparel retailers."
Meanwhile, the analyst believes that department stores have delivered <a href="http://www.benzinga.com/news/earnings/16/11/8680543/q3-a-mixed-bag-for-department-store-stocks-so-far">encouraging earnings reports</a> and the off-price retailers are on deck to report next week.
Boss continued that the retail sector will likely benefit in the fourth quarter and first quarter of 2017 from easy year-over-year compares, especially on the traffic aspect so the sector could see more optimism.
<h3>Retailer Sector Post-Election</h3>
Boss stated that post-election the retail sector as a whole could benefit from lower corporate tax rates under President-elect <a href="http://www.benzinga.com/topic/donald-trump">Donald Trump</a>, while the consumer could also benefit from a reduction in personal tax rates.
He shied away from offering any specific recommendation but did say that the "inspirational consumer" could be shopping more in 2017.
<h3>Relevant ETFs And Trusts</h3>
<ul>
<li>VanEck Vectors Retail ETF (NYSE: <a class="ticker" href="/stock/rth#NYSE">RTH</a>).</li>
<li>SPDR S&amp;P Retail (ETF) (NYSE: <a class="ticker" href="/stock/xrt#NYSE">XRT</a>).</li>
<li>Consumer Discretionary SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>).</li>
<li>Guggenheim S&amp;P Equal Weight Consumer Discretionary ETF (NYSE: <a class="ticker" href="/stock/rcd#NYSE">RCD</a>).</li>
<li>Vanguard Consumer Discretionary ETF (NYSE: <a class="ticker" href="/stock/vcr#NYSE">VCR</a>).</li>
<li>PowerShares Dynamic Retail (ETF) (NYSE: <a class="ticker" href="/stock/pmr#NYSE">PMR</a>).</li>
<li>First Trust Cnsmer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>).</li>
<li>iShares Dow Jones US Consumer Ser. (ETF) (NYSE: <a class="ticker" href="/stock/iyc#NYSE">IYC</a>).</li>
</ul>

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JPMorgan's Retail Analyst: Trump, Warm Weather And The Back Half Of 2016

Comedian John Oliver went after stadium subsidies in his show "<a href="https://www.youtube.com/watch?v=xcwJt4bcnXs">Last Week Tonight with John Oliver</a>," last July. But, as sports season is picking up and more colossal stadiums are set to open soon, looking back to what he said seems appropriate.
In the show, Oliver said many stadiums are built with public money, demonstrating with stats that $12 billion was spend on 51 facilities opened between 2000 and 2010.
Oliver also raised the issue of using taxpayer money for building stadiums and he cited the example of taxpayers bearing 2/3rd of $444 million hockey arena in Detroit.
"Every stadium gets some kind of public money," Oliver said on the show.
Oliver noted that tax exempt municipal bonds, which should be used for building roads or other basic public needs, are used to build stadiums.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/04/7806212/what-the-twitter-nfl-partnership-means-for-twitter">What The Twitter-NFL Partnership Means For Twitter</a></bzrelatedlink>
He said teams are successful businesses and quoted Sun Sentinel's report on the Marlins that showed the team was generating nearly $50 million in operating profits, while the Marlins have long said they weren't making any profits.
"We have to come to our senses and stop signing these deals," Oliver concluded.
<h3>The Trend Continues</h3>
According to an article from the <a href="http://www.citylab.com/politics/2015/09/the-never-ending-stadium-boondoggle/403666/">Atlantic CityLab</a>, "U.S. taxpayers are bearing a large part of the cost. In the past 15 years alone, over $12 billion of the public's money has gone to privately owned stadiums."
The trend is by no means isolated, and the future seems to hold no immanent changes.
Take for instance the still-under-construction U.S. Bank Stadium, home to the Minnesota Vikings slated to open this July. According to CityLab, "[P]ublic dollars account for roughly half the cost &ndash; an estimated $498 million &ndash; of the total $1.06 billion bill."
Looking even further ahead, the Atlanta Falcon's new stadium is set to open next year "at a projected cost of $1.5 billion, with the public picking up an estimated $600 million of its tab," according to CityLab.
CityLab came to the following conclusion: "The overwhelming conclusion of decades of economic research on the subject is that using public funds to subsidize wealthy sports franchises makes zero economic sense and is a giant waste of taxpayer money. A wide array of studies have shown that professional teams add virtually no income to local economies.
"In fact, some of them find that large subsidies actually have a negative effect, taking money out of the local economy [...] Ultimately, the burden of public subsidies falls disproportionately on small cities that are the least able to bear the cost."
Rebecca Sheppard contributed to this report.

Sports

Real Estate

iShares Dow Jones US Broker Dealers Index Fund

SPDR S&P International Telecommunications Sector ETF

PowerShares ETF Leisure & Entertainment Port

Last Year, John Oliver Went After Stadium Subsidies: Have Things Changed Since?

The First Trust Dorsey Wright Focus 5 ETF (First Trust Exchange Traded Fund VI (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>)), one of the stars of 2014&#39;s crop of rookie exchange-traded funds, now has a dynamic counterpart with last week&#39;s launch of the First Trust Dorsey Wright Dynamic Focus 5 ETF (NASDAQ: FVC).
Like FV, the First Trust Dorsey Wright Dynamic Focus 5 ETF holds, in order, the First Trust Consumer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>), First Trust DJ Internet Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), First Trust Cnsumer Stapl Alpha Fd (ETF) (NYSE: <a class="ticker" href="/stock/fxg#NYSE">FXG</a>), First Trust Utilities AlphaDEX Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>) and the First Trust Health Care AlphaDEX Fd(ETF) (NYSE: <a class="ticker" href="/stock/fxh#NYSE">FXH</a>).
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/03/7665385/a-new-muti-asset-etf-of-etfs">A New Multi-Asset ETF Of ETFs</a></bzrelatedlink>
<h3>The Differences Between FV And FVC</h3>
While those ETFs represent all of FV&#39;s lineup, they combine for about 60 percent of the new FVC. The rest of FVC&#39;s lineup is allocated to <a href="http://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FVC">short-term U.S. T-bills</a>.
The relative strength analysis for FVC&#39;s equity ETFs is conducted on a bi-monthly basis as is the analysis for the ETF&#39;s cash holdings, according to Illinois-based <a href="http://www.ftportfolios.com/LoadContent/gr3ukptsgaho">First Trust</a>.
Though FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.
FV&#39;s ability to change holdings was on display earlier this year when it dumped the First Trust NYSE Arca Biotchnlgy Indx Fd (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>) in favor of FXU. However, that move left many FV investors what took so long as FV endured a massive slide in biotech stocks before parting ways to with FBT.
FVC has its work cut out for it when it comes to competing with FV, which has over $3.4 billion in assets under management. However, the new FVC is slightly less expensive than FV, as the former charges 0.79 percent per year, or $79 for each $10,000 invested, compared with FV&#39;s annual expense ratio of 0.89 percent.
Image Credit: <a href="https://pixabay.com/en/welcome-quote-sign-poster-998360/">Public Domain</a>

Long Ideas

New ETFs

First Trust NYSE Arca Biotechnology Index Fund

First Trust Dow Jones Internet Index Fund

Focus 5 ETF Gets A Dynamic Counterpart

The First Trust Dorsey Wright Focus 5 ETF (First Trust Exchange Traded Fund VI (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>)) is reportedly dumping some of its riskier holdings in favor of more conservative fare as the S&amp;P 500 has tumbled 8 percent year to date.
<h3>FV Is An ETF Of ETFs</h3>
Since coming to market in March 2014, FV has held the same five First Trust industry and sector ETFs. Those funds are as follows:
<ul>
<li>First Trust NYSE Arca Biotchnlgy Indx Fd (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>)</li>
<li>First Trust DJ Internet Index Fund (ETF) (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>)</li>
<li>First Trust Cnsumer Stapl Alpha Fd (ETF) (NYSE: <a class="ticker" href="/stock/fxg#NYSE">FXG</a>)</li>
<li>First Trust Health Care AlphaDEX Fd(ETF) (NYSE: <a class="ticker" href="/stock/fxh#NYSE">FXH</a>)</li>
<li>First Trust Cnsmer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>)</li>
</ul>

<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/02/6224695/an-etf-thats-a-good-value-for-value-stocks">An ETF That's A Good Value For Value Stocks</a></bzrelatedlink>
That was FV&#39;s lineup as of February 4, according to <a href="http://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FV">First Trust data</a>.
<h3>An Appreciated Switch</h3>
Citing market evidence and ETF market makers,<a href="http://blogs.barrons.com/focusonfunds/2016/02/05/big-dorsey-wright-etf-gets-defensive-after-sharp-drop/"> Barron&#39;s</a> reported FV made its first change last week, swapping out of FBT for the First Trust Utilities AlphaDEX Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxu#NYSE">FXU</a>). The change is welcome, but it probably also leaves FV investors wondering what took so long.
FBT, the second-largest biotech ETF by assets, has lost a third of its value in the past six months and more than 24 percent in just the past month. Market data suggest the Barron&#39;s report about FV dumping FBT in favor of FXU is accurate. For example, FBT&#39;s volume swelled 17.1 million shares on Friday compared to the ETF&#39;s 90-day average of just over 531,300. FXU&#39;s Friday volume was a staggering 48.3 million compared to a 90-day average of less than 519,000 shares.
Though FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.
<h3>The Bottom Line</h3>
FV, an ETF beloved by advisors and investors that are followers of Dorsey Wright&#39;s momentum-based, relative strength strategies, is home to over $3.6 billion in assets under management, making it one of the most successful ETFs to come to market in 2014. However, investors have pulled nearly $448 million from the ETF this year. 
Image Credit: <a href="https://pixabay.com/en/stock-exchange-trading-floor-738671/">Public Domain</a>

Broad U.S. Equity ETFs

Short Ideas

Intraday Update

Popular ETF Of ETFs Gets Defensive After Market Slide

Plenty of exchange traded funds experienced acute volatility at the open of U.S. markets Monday and the First Trust Dorsey Wright Focus 5 ETF (NASDAQ: <a class="ticker" href="/stock/fv#NASDAQ">FV</a>) was no exception.

	FV, an ETF beloved by advisors and investors that are followers of Dorsey Wright&#39;s momentum-based, relative strength strategies, shows an intra-day range of $11.70 to $22.98. While that could speak to conspiracy theories of a mini &ldquo;flash crash&rdquo; for FV, charts for the ETFs five holdings all show similarly wild candles and wide intraday ranges.

	For example, the First Trust NYSE Arca Biotechnology Index Fund (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>) traded as low as $70, but now resides above $110 while the First Trust Health Care AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxh#NYSE">FXH</a>) touched $44.41 before running back above $63. FBT and FXH are FV&#39;s two largest holdings, combining for more than <a href="http://www.ftportfolios.com/Retail/Etf/EtfHoldings.aspx?Ticker=FV">46 percent of FV&#39;s weight</a>.

	FV&#39;s other holdings are the First Trust Dow Jones Internet Index Fund (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), First Trust Consumer Staples AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxg#NYSE">FXG</a>) and the First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>). Yes, that trio have also traded in jaw-dropping ranges.

	Monday&#39;s chaos not withstanding, FV&#39;s roster speaks to the ETF&#39;s vulnerability in the current market environment. Said another way, what drove the ETF higher for much of this year is now an albatross, that being significant biotech exposure. Not only is FBT, the second-largest biotech ETF by assets, FV&#39;s largest holding, but FXH, the AlphaDEX health care ETF, <a href="http://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FXH">has a 20.2 percent weight</a> to biotech stocks.
<h3>
	Another Problem</h3>

	Biotech is not the only problem for FV. The ETF&#39;s Internet exposure via FDN, also previously a selling point, has turned problematic. Nine of FDN&#39;s top 10 holdings, a group that combines for nearly 60 percent of that ETF&#39;s weight, are members of the Nasdaq Composite and that benchmark has tumbled 7.1 percent over the past month.

	Things have gotten so rough for momentum stocks and ETFs that over the past month, the best-performing member of FV&#39;s roster is FXG, the AlphaDEX consumer staples ETF, and that fund is still down 3.5 percent.

	However, there is a silver lining with FV. Though FV is considered a passively managed ETF, relative strength analysis of its constituent ETFs is conducted weekly, meaning if one (or more) of the holdings tumble enough, they can be removed from FV and replaced with other First Trust sector and industry funds displaying better relative strength traits.

	On that subject, it is interesting to note that FV debuted in March 2014, right before the albeit somewhat brief biotech and Internet meltdown experience that year, and the fund&#39;s holdings have yet to change.

A Wild Day For A Beloved Momentum ETF

The S&amp;P 500 is virtually flat on the year, but with the large index there are sectors on the move. The consumer discretionary sector is the second-best performing sector in the index, with a gain of 3.7 percent this year, trailing only the healthcare stocks.

	The numbers suggest Americans are <a href="http://www.dnj.com/story/money/business/2015/02/20/consumers-spending-money-saved-gas/23732031/">not spending</a> a large amount of the money they are saving at the gas pump. The savings rate has been moving in an upward trend as the yearly change in gas prices have been moving straight down. That being said, the performance of the consumer-related companies suggests there is money making its way into their pockets.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/15/03/5341083/consumer-spending-not-hurting-retail-etfs">Consumer Spending Not Hurting Retail ETFs</a></bzrelatedlink>
<h3>
	Sail Me Away</h3>

	A niche area within the consumer discretionary sector that has done particularly well of late is the cruise liners industry. Carnival Corp (NYSE: <a class="ticker" href="/stock/ccl#NYSE">CCL</a>), Royal Caribbean Cruises Ltd (NYSE: <a class="ticker" href="/stock/rcl#NYSE">RCL</a>) and Norwegian Cruise Line Holdings Ltd (NASDAQ: <a class="ticker" href="/stock/nclh#NASDAQ">NCLH</a>) have been able to benefit from low gas prices on both sides of the coin.

	On one side they have increased sales due to more people using extra savings to go on cruises, and on the other side they save on fuel costs for running their massive cruise ships. It&#39;s a win-win for the industry.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/03/5345000/wedbush-puts-norwegian-cruise-line-on-top">Wedbush Puts Norwegian Cruise Line On Top</a></bzrelatedlink>

	Carnival announced first-quarter earnings on Friday, posting earnings per share of $0.20, beating estimates by $0.10. Even though the revenue number of $3.53 billion missed estimates by $40 million, the stock rallied on the news. The positive earnings report rippled across the industry, sending Royal Caribbean Cruises and Norwegian Cruise Line higher.

	Highlighted below are two ETFs that are benefiting from increased consumer spending and have the cruise liners in their portfolios.
<h3>
	Consumer Discretionary Select Sector SPDR ETF</h3>

	The Consumer Discretionary SPDR (ETF) (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>) tracks 87 stocks across 12 sub-sectors within the consumer discretionary sector. Media at 28 percent and specialty retail at 20 percent are the top weighted sectors.

	The top individual holdings include:
<ul>
<li>
		Walt Disney Co (NYSE: <a class="ticker" href="/stock/dis#NYSE">DIS</a>) making up 7.2 percent</li>
<li>
		Home Depot Inc (NYSE: <a class="ticker" href="/stock/hd#NYSE">HD</a>) with a 6.5 percent holding</li>
<li>
		Comcast Corporation (NASDAQ: <a class="ticker" href="/stock/cmcsa#NASDAQ">CMCSA</a>) at 6.2 percent</li>
</ul>

	The ETF is up 17 percent over the last 12 months and 11 percent over the last six months. XLY has an expense ratio of 0.15 percent.
<h3>
	First Trust Consumer Discretionary AlphaDEX ETF</h3>

	The First Trust Cnsmer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>) is made up of 131 stocks that show the best balance of both growth and value. The ETF is distributed across ten sectors with specialty retail at 31 percent and hotels, restaurant and leisure at 11 percent.

	The top individual holdings include:
<ul>
<li>
		Graham Holdings Co (NYSE: <a class="ticker" href="/stock/ghc#NYSE">GHC</a>) at 1.5 percent</li>
<li>
		Ulta Salon, Cosmetics &amp; Fragrance, Inc. (NASDAQ: <a class="ticker" href="/stock/ulta#NASDAQ">ULTA</a>) making up 1.5 percent</li>
<li>
		Dollar Tree, Inc. (NASDAQ: <a class="ticker" href="/stock/dltr#NASDAQ">DLTR</a>) coming in at 1.4 percent</li>
</ul>

	The ETF is up 25 percent over the last 12 months and up 3 percent over the last six months. FXD has an expense ratio of 0.70 percent.

Travel

CMCSA

DLTR

NCLH

ULTA

American Spending Is Great News For ETFs

The <a href="http://www.benzinga.com/topic/consumer-discretionary">consumer discretionary sector</a> is one that is often most closely tied to the healthy spending habits of the American public. After all, confidence in consumer activity is usually tied to purchases of high value items such as cars, luxury goods and other specialty retail splurges.
<h3>
	Consumer Discretionary Select Sector SPDR</h3>

	Since the beginning of earnings season, the Consumer Discretionary SPDR (EFT) (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>) has been fortunate enough to receive a few positive surprises in some of its largest holdings. Walt Disney Co (NYSE: <a class="ticker" href="/stock/dis#NYSE">DIS</a>), Amazon.com, Inc. (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>) and Starbucks Corporation (NASDAQ: <a class="ticker" href="/stock/sbux#NASDAQ">SBUX</a>) are just a few of the strong publicly traded companies in this ETF.

	XLY tracks a total of 87 large-cap media, hotel, home improvement, restaurant and luxury retailers. This market-cap weighted <a href="http://www.benzinga.com/topic/etf">ETF</a> is considered the sector benchmark based on its longevity and significant $8.2 billion asset base. In addition, XLY charges a modest 0.15 percent expense ratio to administer the fund.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/etfs/sector-etfs/15/01/5186186/poor-earnings-hit-etfs">Poor Earnings Hit ETFs</a></bzrelatedlink>

	XLY underperformed the market in 2014 with a gain of just 9.49 percent compared to 13.54 percent in the SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>). Despite a rocky start in January, it appears poised to take out its 52-week high and could potentially be a market leading segment in 2015.
<div id="preview-wrapper">
<div id="file-preview">
		<a href="https://www.benzinga.com/imce?app=nomatter%7Cimceload%40imceInline.load#" title=""><img alt="xly_2.png" height="284" src="https://www.benzinga.com/files/u79448/xly_2.png" width="460" /></a></div>
</div>

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/02/5205829/imperial-capital-analyst-thinks-rumor-of-ackman-short-in">Imperial Capital Analyst Thinks Rumor Of Ackman Short In Whole Foods Is Unlikely</a></bzrelatedlink>
<h3>
	First Trust Consumer Discretionary Alpha DEX Fund</h3>

	Another well-diversified alternative in this segment is the First Trust Cnsmer Disry Alpha Fnd (ETF) (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>). This ETF uses fundamental screening criteria to select consumer stocks from the Russell 1000 Index based on growth factors that include solid recent performance, sales growth, return on assets and cash flow.

	The end result is a portfolio of 132 stocks with markedly different construction criteria when compared to XLY. The underlying holdings contain a more equal dispersion of assets across multiple industry groups and market caps.

	Last year, FXD had a better return than XLY, with a gain of 11.62 percent. However, it should be noted that the more stringent screening criteria also comes with a higher expense ratio of 0.70 percent.

	This sector should be one to watch through the remainder of February as further guidance comes through and quarterly earnings from some of the top media and home construction brands likewise report.

SBUX

Consumer Discretionary ETFs Receive Earnings Season Boost

&nbsp;

	 
	By&nbsp;<a data-ls-seen="1" href="http://www.dailygainsletter.com/author/mohammadzulfiqar/" rel="author" style="background-color: rgb(255, 255, 255); font-size: 12px; line-height: 16px;" title="Posts by Moe Zulfiqar">Moe Zulfiqa</a>r


	 
	<a data-ls-seen="1" href="http://www.dailygainsletter.com/consumer-confidence/" style="font-size: 12px; line-height: 16px;" title="Consumer confidence">Consumer confidence</a>&nbsp;in the&nbsp;<a data-ls-seen="1" href="http://www.dailygainsletter.com/u-s-economy/" style="font-size: 12px; line-height: 16px;" title="U.S. economy">U.S. economy</a>&nbsp;is bleak, and if it doesn&rsquo;t pick up, the&nbsp;<a data-ls-seen="1" href="http://www.dailygainsletter.com/economic-growth/" style="font-size: 12px; line-height: 16px;" title="economic growth">economic growth</a>&nbsp;in the U.S. economy will be in jeopardy, and those who are highly affected by it&mdash;companies in the consumer discretionary sector&mdash;will face troubles.


	 
	What many forget is that consumer confidence and consumer spending have a direct relationship; if consumer confidence declines, we generally see consumer spending decline as well. As consumers become worried about their jobs, financial conditions, and/or general economic conditions, they tend to pull back on their spending. Would you go buy a luxury car or big household items if you knew that your job was in jeopardy, or you had no or very little savings?


	 
	The Conference Board Consumer Confidence Index, an index that tracks the sentiment of consumers in the U.S. economy, continued its slide in November after sharply declining in October. In November, it sat at 70.4, 2.8% lower from the previous month, when it was 72.4. (Source: &ldquo;Consumer Confidence Declines Again in November,&rdquo; The Conference Board web site, November 26, 2013.)


	 
	This isn&rsquo;t all for consumer confidence. One of the clearest examples of bleak consumer confidence was just last week, at the Black Friday sales. We saw consumers become very cost-savvy, which resulted in retailers opening stores early and providing very deep discounts. Early indicators from the National Retail Federation state that consumers spent an average of $407.02 from Thursday through Sunday, down about four percent from what they spent last year. (Source: National Retail Federation press release, December 1, 2013.)


	 
	What does it mean for investors?


	 
	Investors have to keep a few important factors in mind when looking at consumer confidence in the U.S. economy.


	 
	At the very core, if consumer confidence continues to fall further, consumer spending will start to follow the same direction. This can cause the growth rate of the gross domestic product (GDP) to slow, and if consumers aren&rsquo;t buying, factories will produce less. As a result, businesses will have to make changes to their operations: reducing their labor force, cutting costs, etc.


	 
	In addition, investors have to bear in mind that when consumer confidence is declining&mdash;and from Black Friday sales, we see they are&mdash;their profit margins begin to go down.


	 
	My take is that I wouldn&rsquo;t be surprised to see retailers, especially those in the consumer discretionary sector, face headwinds going forward; this will eventually reflect in their stock prices. Those who already own companies involved in the consumer discretionary sector may want to consider taking some profits off the table. Remember: when investors take profits off the table, their worst-case scenario is still profit.


	 
	Those investors who want to profit from this opportunity may do so by shorting exchange-traded funds (ETFs) like the First Trust Consumer Discretionary AlphaDEX (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>). This ETF invests in companies involved in the consumer discretionary sector. Remember that shorting can result in unlimited losses; if investors choose to go ahead with this strategy, they have to be very careful and use proper risk management techniques, in case the trade works against them.


	 
	This article&nbsp;<a data-mce-href="http://www.dailygainsletter.com/investment-strategy/are-these-retailers-worth-the-investment/2163/" href="http://www.dailygainsletter.com/investment-strategy/are-these-retailers-worth-the-investment/2163/" style="font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 10px; line-height: normal; background-color: rgb(255, 255, 255);">Are These Retailers Worth the Investment?</a>&nbsp;was originally published at&nbsp;<a data-mce-href="http://www.dailygainsletter.com" href="http://www.dailygainsletter.com/" style="font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 10px; line-height: normal; background-color: rgb(255, 255, 255);" target="_blank">Daily Gains Letter</a>

Are These Retailers Worth the Investment?

By&nbsp;<a data-ls-seen="1" href="http://www.dailygainsletter.com/author/johnwhitefoot/" rel="author" style="text-decoration: underline; font-family: Verdana, Arial, Geneva, sans-serif; font-size: 12px; line-height: 16px; background-color: rgb(255, 255, 255);" title="Posts by John Whitefoot">John Whitefoot</a>

	Bad news on Main Street is good news for Wall Street. Illogical heads prevailed on Tuesday after the U.S. government announced that the unemployment rate dipped to an ever-so-modest 7.2% in September, from 7.3% in August. The U.S. added just 148,000 new jobs in September&mdash;far short of the forecasted gain of 180,000 jobs for the month. (Source: &ldquo;The Employment Situation &ndash; September 2013,&rdquo; Bureau of Labor Statistics web site, October 22, 2013.)

	The number of long-term unemployed (those without a job for at least 27 weeks) remains stubbornly high at 4.1 million, and the underemployment rate is at an eye-watering 13.6%, up a sliver from 13.4% in August.

	Weak jobs numbers means the&nbsp;<a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/federal-reserve/" href="http://www.dailygainsletter.com/federal-reserve/" title="Federal Reserve">Federal Reserve</a>&nbsp;will continue its $85.0-billion-per-month quantitative easing policy into 2014. Those who do not read these pages were apparently surprised last month when the Federal Reserve did what it said it was going to do&mdash;namely, keep its stimulus package intact until the economy improves to a 6.5% unemployment rate and a 2.5% inflation rate.

	It clearly hasn&rsquo;t, isn&rsquo;t, and won&rsquo;t for the foreseeable future.

	Those bad jobs numbers sent the&nbsp;S&amp;P 500&nbsp;into record intra-day territory. In the week since Congress ended the&nbsp;<a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/us-government-shutdown/" href="http://www.dailygainsletter.com/us-government-shutdown/" title="U.S. government shutdown">U.S. government shutdown</a>, raised the debt ceiling, and reported stubbornly high unemployment, the S&amp;P 500 climbed more than three percent. Year-to-date, the S&amp;P 500 is up more than 22%.

	That increase is in sharp contrast to anything approaching reality on Wall Street. During the first quarter of 2013, 78% of S&amp;P 500 companies issued negative earnings-per-share (EPS) guidance, 81% during the second quarter, and a record 83% for the third quarter. (Source: &ldquo;Earnings Insight,&rdquo; FactSet web site, October 4, 2013.)

	Even after a record number of S&amp;P 500 companies revised their earnings lower, they&rsquo;re still having trouble meeting their depressed forecasts. Granted, while only one-fifth of the companies in the S&amp;P 500 have reported actual results, the percentage that has reported earnings above estimates is below the four-year average. At the same time, the percentage of companies that have reported revenue above estimates is also below the four-year average.

	The fourth quarter is less than a month old, but already, 18 companies in the S&amp;P 500 have issued EPS guidance for the fourth quarter. Of these, 14 have issued negative EPS guidance and four have issued positive EPS guidance&mdash;meaning that 78% have issued negative guidance, well above the five-year average of 63%. That number will continue to rise the deeper we get into the fourth quarter. (Source: &ldquo;Earnings Insight,&rdquo; FactSet web site, October 18, 2013.)

	What all of this disconnect means is that you can&rsquo;t fight quantitative easing. So long as the U.S. economy remains weak and the easy money is flowing, the S&amp;P 500,&nbsp;<a data-ls-seen="1" data-mce-href="http://www.dailygainsletter.com/dow-jones-industrial-average/" href="http://www.dailygainsletter.com/dow-jones-industrial-average/" title="Dow Jones Industrial Average">Dow Jones Industrial Average</a>, NASDAQ, and NYSE will continue to notch up gains.

	It also means that it&rsquo;s not too late for investors on the sidelines to take advantage of Wall Street&rsquo;s neurotic optimism and the Federal Reserve&rsquo;s generosity. Those bullish on the S&amp;P 500 might want to look into the SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>).

	Or, knowing that the consumer discretionary sector has reported the highest earnings growth for the quarter, it might not be a bad idea to look at a corresponding exchange-traded fund (ETF) like the PowerShares Dynamic Consumer Disc (NYSE: <a class="ticker" href="/stock/pez#NYSE">PEZ</a>) or First Trust Consumer Disc AlphaDEX (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>).

	Everything you learned in school about rational investors making informed decisions based on sound due diligence is an urban legend; investors follow the money. And for now, that trail leads to the Federal Reserve&rsquo;s overworked printing press.

	This article&nbsp;<a data-mce-href="http://www.dailygainsletter.com/economy/wall-street-cheers-13-6-unemployment-rate-sp-500-soars/2029/" href="http://www.dailygainsletter.com/economy/wall-street-cheers-13-6-unemployment-rate-sp-500-soars/2029/" target="_blank">Wall Street Cheers 13.6% Unemployment Rate; S&amp;P 500 Soars!</a>&nbsp;was originally published at&nbsp;<a data-mce-href="http://www.dailygainsletter.com" href="http://www.dailygainsletter.com/" target="_blank">Daily Gains Letter</a>

Economics

PowerShares Dynamicnsumer Discretionary Sector Portfolio

Wall Street Cheers 13.6% Unemployment Rate; S&P 500 Soars!

Broadly speaking, U.S. economic data released this year has been solid. Of course there have been hiccups along the way, a slightly higher unemployment rate seen in last Friday's May jobs report is one example, but overall the data have been decent.

	Improving data points have included some good news regarding U.S. consumers, or those folks that drive 70 percent of this country's GDP. Chipper consumers have meant good things for discretionary and retail ETFs, a conversation that often revolves around a small number of ETFs such as the Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>) and the SPDR S&amp;P Retail ETF (NYSE: <a class="ticker" href="/stock/xrt#NYSE">XRT</a>).

	Good choices to be sure as XLY, the largest discretionary ETF, is up 17.4 percent year-to-date. XRT, which takes an equal-weight approach to the retail sub-sector, has surged nearly 25 percent. Not every discretionary ETF <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/06/3651928/if-analysts-are-right-casino-etf-could-keep-winning">gets the attention it deserves</a> and with that in mind, here are few such funds to consider should consumer data keep improving.

	PowerShares S&amp;P SmallCap Consumer Discretionary Portfolio (NASDAQ: <a class="ticker" href="/stock/pscd#NASDAQ">PSCD</a>) 
	In the essence of brevity, the PowerShares S&amp;P SmallCap Consumer Discretionary Portfolio is the small-cap equivalent of XLY, obviously courtesy of a different issuer. The PowerShares offering gives investors exposure to retail, automotive, leisure and recreation, media and real estate. PSCD's 106-stock lineup has rewarded investors this year with a gain of 21 percent.

	This is another one of those ETFs that know-it-alls that are in love with superficial evaluation tools such as assets under management would tell investors to stay away from. Indeed, PSCD has just $77.4 million in AUM, but its year-to-date returns indicate staying away from this ETF on that basis was a dumb move.

	PSCD's largest holdings are heavily traded and the ETF rarely trades at noticeable premiums or discounts to its net asset value, <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=PSCD">according to PowerShares data</a>, indicating the fund is sufficiently liquid.

	First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>) 
	The First Trust Consumer Discretionary AlphaDEX Fund follows the same path as <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2971334/alphadex-etfs-do-things-differently-with-stellar-results">as the other AlphaDEX ETFs</a> and that can work in favor of investors in the right market environment. For example, FXD is up 35 percent in the past year compared to 33 percent for XLY.

	Like the other AlphaDEX funds, FXD eschews weighting by market cap in favor of a focus on a value and growth factors. The result is a lineup of 125 stocks with none receiving a weight north of 1.62 percent. Top-10 holdings include Guess (NYSE: <a class="ticker" href="/stock/ges#NYSE">GES</a>), General Motors (NYSE: <a class="ticker" href="/stock/gm#NYSE">GM</a>) and Pandora (NYSE: <a class="ticker" href="/stock/p#NYSE">P</a>).

	FXD, which has almost $625 million in assets under management, allocates more than 38 percent of its combined weight to media and specialty retail names. The one drawback here is that the ETF's three-year standard deviation is about 300 basis points higher than the S&amp;P 500 Consumer Discretionary Index's, <a href="http://www.ftportfolios.com/Retail/Etf/EtfSummary.aspx?Ticker=FXD">according to First Trust data</a>.

	Guggenheim S&amp;P 500 Equal-Weight Consumer Discretionary ETF (NYSE: <a class="ticker" href="/stock/rcd#NYSE">RCD</a>) 
	As is the case with the AlphaDEX funds, there are times when equal-weight sector ETFs outpace their cap-weighted rivals. The $61.8 million RCD has been doing that (compared to XLY) over the past year. RCD is dominated by the specialty retail, media and hotel and restaurant sub-sectors with those groups combining for about 54 percent of the fund's weight.

	Holdings include Best Buy (NYSE: <a class="ticker" href="/stock/bby#NYSE">BBY</a>), Coach (NYSE: <a class="ticker" href="/stock/coh#NYSE">COH</a>) and Wynn Resorts (NASDAQ: <a class="ticker" href="/stock/wynn#NASDAQ">WYNN</a>). RCD's expense ratio of 0.5 percent per year is nearly triple that of XLY's, and like FXD, RCD is also slightly more volatile than XLY.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

PSCD

WYNN

Three Discretionary ETFs Your Broker Forgot to Mention (PSCD, FXD, RCD)

Since March 22, 2010, the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) has returned 42 percent, including dividends paid. An impressive performance to be sure, but it is often said, and it is true, that sectors lead the broader market not the other way around.

	On a related note, a frequently discussed topic in recent months has been what sectors are displaying leadership qualities. With <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/03/3443630/u-s-staples-etfs-are-expensive-but-so-are-em-equivalents">consumer staples ranking high on that list</a>, some investors, professional and retail, have doubted the viability of the broader market rally.

	Interestingly, a case can be made that this has been a "risk off" rally for three years now. Using the nine Select Sector SPDRs as the barometers while going back to March 22, 2010, only one so-called risky ETF has offered noteworthy out-performance of those sector funds that are perceived to have less risk. That ETF is the Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>).

	The Consumer Discretionary Select Sector SPDR has returned 68.6 percent since March 22, 2010, meaning the ETF has been simply dominant over other sector funds such as the Materials Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlb#NYSE">XLB</a>), the Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) and the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>).

	XLY has easily trumped XLF and XLB over the past 24 months as well. Over that time, XLY has offered better than six times the returns of XLB and almost double the returns of XLK. Remember, XLK had the benefit of having Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) among its top holdings as that stock surged to astronomical heights.

	Not High Beta 
	What may come as a surprise to some investors is that XLY is not extremely volatile despite being home to stocks that are believed to be intimate plays on consumer confidence and sentiment such as Amazon (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>), Home Depot (NYSE: <a class="ticker" href="/stock/hd#NYSE">HD</a>) and Walt Disney (NYSE: <a class="ticker" href="/stock/dis#NYSE">DIS</a>). The ETF has a beta of one against the S&amp;P 500 and annualized volatility of 16.88 percent, <a href="https://www.spdrs.com/product/fund.seam?ticker=XLY">according to State Street data</a>.

	That is a slightly lower beta than what is seen on XLK. Over the past three years, XLY has been about 500 basis points less volatile than XLB and the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>), <a href="http://www.etfreplay.com/charts.aspx">according to ETF Replay data</a>.

	XLE and XLB currently have betas against the S&amp;P 500 of 1.28 and 1.22, respectively.

	Not The Only One 
	With $4.44 billion in assets under management, XLY is the largest discretionary ETF by that metric. It is home to plenty of familiar names and heavily traded with average daily volume of almost 5.5 million shares over the past three months.

	However, XLY is not the only generator of noteworthy discretionary ETF returns over the past several years. With a three-year return of 67.6 percent, the Vanguard Consumer Discretionary ETF (NYSE: <a class="ticker" href="/stock/vcr#NYSE">VCR</a>) stacks up favorably against the other non-discretionary sector ETFs mentioned here as well as Vanguard's own lineup of sector funds.

	While VCR and XLY are comparable on many levels, cost-conscious investors should keep an eye on this tussle in the coming months because a recent fee reduction by Vanguard means VCR is four basis points cheaper than XLY. That works out to 0.14 percent per year for VCR and 0.18 percent for XLY.

	Investors that are willing to embrace some added risk can consider the First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>). Although FXD has lagged VCR and XLY over the past three years, but the First Trust offering has significantly outpaced other sector funds as well over that time, including energy, materials and technology.

	FXD is not a market cap-weighted ETF. Rather, it uses growth and value metrics to parse through possible constituents. The result is an ETF that looks far different than VCR or XLY in terms of holdings. FXD holds 125 stocks with the top holding being Netflix (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>) at a weight of just 2.45 percent. Other top-10 holdings include Starz (NASDAQ: <a class="ticker" href="/stock/strza#NASDAQ">STRZA</a>) and Virgin Media (NASDAQ: <a class="ticker" href="/stock/vmed#NASDAQ">VMED</a>).

	FXD has been a decent performer over the past year with a gain of 12.2 percent, but some lower risk sector funds such as the Consumer Staples Select SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) have delivered better gains. FXD has a three-year standard deviation of 20.4 percent compared to 17.1 percent for the S&amp;P 500 Consumer Discretionary Index, <a href="http://www.ftportfolios.com/retail/etf/etfsummary.aspx?Ticker=FXD">according to First Trust data</a>.

	That could be viewed as a sign that FXD is better suited to an environment that is more risk on friendly, but it is worth noting FXD has outpaced VCR and XLY year-to-date.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

NFLX

STRZA

VMED

Discretionary ETF: Best SPDR For 3 Years

Here is the ETF Professor's ETF Watch List for Tuesday November 13, 2012.

Broad market play of the day: Rydex Russell Top 50 ETF (NYSE: <a class="ticker" href="/stock/xlg#NYSE">XLG</a>).

The iShares Nasdaq Biotechnology Index Fund (NASDAQ: <a class="ticker" href="/stock/ibb#NASDAQ">IBB</a>) should be in play once again.

What is the iPath S&amp;P 500 VIX Short-Term Futures ETN (NYSE: <a class="ticker" href="/stock/vxx#NYSE">VXX</a>) telling traders?

Keep an eye on the First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>).

Emerging markets plays of the day: WisdomTree India Earnings ETF (NYSE: <a class="ticker" href="/stock/epi#NYSE">EPI</a>), Market Vectors Russia Small-Cap ETF (NYSE: <a class="ticker" href="/stock/rsxj#NYSE">RSXJ</a>) and the SPDR S&amp;P Emerging Europe ETF (NYSE: <a class="ticker" href="/stock/gur#NYSE">GUR</a>).

Forex play of the day: ProShares UltraShort Yen (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>).

Bond play of the day: WisdomTree Emerging Markets Local Debt ETF (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>).

Emerging Market ETFs

Currency ETFs

Pre-Market Outlook

RSXJ

Barclays Bank iPath S&P 500 VIX Short-Term Futures ETN

ETFs to Watch November 13, 2012 (IBB, RSXJ, XLG)

Mercifully, a rough October for the bulls has drawn to a close. The better news is that November has a reputation for being kind to stocks. After all, the eleventh month of the year is the first month in the strongest six-month cycle in which to own stocks. Better still is the fact that this is a presidential election year and November has been the best month of the year in which to own stocks in that scenario for more than 10 elections.

Since 1950, November is tied with April as the second-best month of performance for the S&amp;P 500 with an average gain of 1.5 percent, according to the Stock Trader's Almanac. Of course, some sectors outperform others at any point during the year and that is certainly the case in November.

For example, over the past 25 Novembers, the energy and natural resources sectors <a href="http://allocationforlife.blogspot.com/2012/10/november-historical-sector-analysis.html">have only posted monthly gains 11 times</a>. So this probably is not the month to go running to the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) or the Materials Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlb#NYSE">XLB</a>).

The following represent some of the better ideas at the sector for the month of November.

iShares Dow Jones US Telecom Index Fund (NYSE: <a class="ticker" href="/stock/iyz#NYSE">IYZ</a>)
Already being touted as a viable play on an <a href="http://www.benzinga.com/markets/bonds/12/10/3040448/in-7-days-an-obama-win-could-send-these-etfs-soaring">Obama reelection</a>, IYZ and comparable ETFs are in the sweet spot of favorable seasonal trends.

In Novembers dating back to 1987, the telecom sector has posted up months 16 of 25 times with a mean gain of 1.67 percent, according to Allocationforlife.com. That number is slightly skewed by an almost 11 percent gain in 1999 and a plunge of nearly 22 percent in 2000, but telecom names perform well in November. Period. An Obama reelection could just be icing on the cake for IYZ, the Vanguard Telecommunications ETF (NYSE: <a class="ticker" href="/stock/vox#NYSE">VOX</a>) and related funds.

PowerShares QQQ (NASDAQ: <a class="ticker" href="/stock/qqq#NASDAQ">QQQ</a>)
With the way Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) lately (off almost 11 percent in the past month), shying away from ETFs heavy on the technology sector might seem like a smart move. Seasonally speaking, it is not a good idea. With an average gain of 1.6 percent in Novembers dating back to 1971, only two months of the year, January and December, are more kind to the Nasdaq. 

As luck would have it, traders will quickly be able to figure out what November 2012 has in store for QQQ. The ETF is currently found resting at critical support. That support level is also QQQ's 200-day moving average. If that gives out, QQQ could have significant downside ahead. If buyers step in and do so quickly, QQQ should rally into the first quarter.

The tech sector has climbed in 15 of the past 25 Novembers.

Market Vectors Pharmaceutical ETF (NYSE: <a class="ticker" href="/stock/pph#NYSE">PPH</a>)
Like IYZ, the Market Vectors Pharmaceutical ETF is perceived to be a low-beta play and low-beta has worked this year. PPH shares some other things in common with telecom ETFs. The pharmaceuticals fund has given back some of its gain recently and this ETF is another one that could see near-term upside if President Obama wins reelection.

And like the telecom sector, health care has a penchant for performing well in November. The sector has climbed in 17 of the past 25 Novembers, according to Allocationforlife. Regarding PPH, the ETF is different today than it was when it debuted in 2000 (it used to be HOLDRs ETF), it is worth noting the fund has risen in nine Novembers since 2000.

First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>)
Holiday shopping is certainly one reason why discretionary tend to perform well in November. That thesis may seem too simple to be profitable, but it has worked as the consumer discretionary sector has risen in about two-thirds of the previous 25 Novembers. November bullishness for discretionary stocks and ETFs can be the start of more upside through year-end and into the first quarter as well.

As for the First Trust Consumer Discretionary AlphaDEX Fund, the ETF has lagged more traditional cap-weighted discretionary ETFs this year. However, FXD has some traits worth acknowledging. First, no stock accounts for more than 1.58 percent of the ETF's weight, meaning the fund is not excessively exposed to the whims of just one or two stocks. Second, First Trust's AlphaDEX suite employs <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/2971334/alphadex-etfs-do-things-differently-with-stellar-results">screening techniques based on growth and value metrics</a>. 

That could give FXD a leg up on its rivals, particularly if risk on returns in earnest. Actually, FXD is already starting to outpace some of its rivals. Over the past 90 days, FXD is up 8.5 percent compared to 6.2 percent for the Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>).

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Technicals

iShares Dow Jones US Telecommunications Sector Index Fund

Merrill Lynch Pharmaceutical HOLDRs Trust

These ETFs Could Soar in November

With Dow component Alcoa (NYSE: <a class="ticker" href="/stock/aa#NYSE">AA</a>) reporting earnings after the bell on Monday, another earnings season has officially arrived. Following a glum June jobs report, traders and investors might be looking to corporate earnings report to lift stocks and spur a summertime rally, but the statistics indicate the rosiest of scenarios are off the table.

As of July 6, 85 S&amp;P 500 constituents warned their results would not meet Wall Street expectations. The quarter's expected earnings growth of 5.8 percent is entirely due to Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) and Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>), according to Reuters. 

Bank of America's contribution comes courtesy of one-time gains. The NBA market is back: Nothing but Apple. Even with Apple being the primary driver of S&amp;P 500 earnings once again, a plethora of other companies and sectors will be under intense scrutiny this earnings season. Here are some of the ETF plays that could standout for both good and bad reasons in the coming weeks.

iShares Dow Jones U.S. Technology Sector Index Fund (NYSE: <a class="ticker" href="/stock/iyw#NYSE">IYW</a>)
The iShares Dow Jones U.S. Technology Sector Index Fund has steadily gained notoriety for one simple reason: It is the ETF with the largest <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/06/2656447/4-etfs-for-apples-developers-conference-iyw-qqq-rew">allocation to Apple</a>. Beyond the 23.8 percent weight to Apple, IYW will be in focus this earnings season.

Micorsoft (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>), the world's largest software company and 9.5 percent of IYW's weight, has already warned on its upcoming profit report, but dark clouds for IYW may not end there. Last week, <a href="http://news.investors.com/article/617203/201207051839/informatica-warns-will-miss-q2-profit-sales.htm?src=HPLNews">BMO Capital cut its 2012 revenue estimates</a> on IBM (NYSE: <a class="ticker" href="/stock/ibm#NYSE">IBM</a>) and EMC (NYSE: <a class="ticker" href="/stock/emc#NYSE">EMC</a>) among others. IBM and EMC combine for 11 percent of IYW's weight. 

Arguably, Apple will have to do all of the heavy lifting for IYW this earnings season.

Market Vectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>)
Oil services earnings do not kick into high gear until July 20 when Schlumberger (NYSE: <a class="ticker" href="/stock/slb#NYSE">SLB</a>), the world's largest provider of oilfield services, reports its second-quarter results. It is worth noting OIH (or a rival fund) makes frequent appearances on these ETFs for earnings season lists. 

Helmerich &amp; Payne (NYSE: <a class="ticker" href="/stock/hp#NYSE">HP</a>) and Pioneer Drilling (NYSE: <a class="ticker" href="/stock/pdc#NYSE">PDC</a>) <a href="http://online.wsj.com/article/SB10001424052702303933404577502782337917076.html">issued weaker outlooks last week. Halliburton (NYSE: </a><a class="ticker" href="/stock/hal#NYSE">HAL</a>) (in early June) said rising <a href="http://www.benzinga.com/news/earnings/12/06/2648263/halliburton-guidance-pressures-oil-services-etfs-oih-iez">guar gum prices would suppress second quarter margins</a>.

Add to that, amid surging output and falling prices for natural gas liquids, exploration and production companies are expected to pare their capital budgets, which spells bad news for service providers.

Materials Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlb#NYSE">XLB</a>)
Despite the highly cyclical nature of its constituency, the Materials Select Sector SPDR has held up well in recent weeks. A gain of one percent in the past month for an ETF like this is nothing to scoff at given the spate of weak economic data the market has had to digest.

Many of XLB's holdings should be benefiting from lower energy prices, but with the outlook for the global economy tepid at best, this ETF and others like it are being held hostage by macroeconomic headwinds. 

If companies such as DuPont (NYSE: <a class="ticker" href="/stock/dd#NYSE">DD</a>), Dow Chemical (NYSE: <a class="ticker" href="/stock/dow#NYSE">DOW</a>) and Freeport-McMoRan (NYSE: <a class="ticker" href="/stock/fcx#NYSE">FCX</a>) can provide investors with positive earnings surprises, then the risk-on trade could easily be renewed. Problem is, that is a tough bet to make.

First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>)
More so than the rival Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>), the First Trust Consumer Discretionary AlphaDEX has fallen victim to weak economic data. FXD is down more 1.1 percent in the past month while XLY is up a third of a percent over the same time.

Home to 125 stocks, FXD allocates no more than 1.45 percent to any individual holding. How the ETF weights its component is not a problem. In fact, FXD's methodology would be a selling point in a bull market. 

The ETF's downside potential is derived from an almost 26 percent allocation to specialty retail names, an almost 12 percent to hotel and restaurant stocks and a nearly nine percent weight to the auto industry (manufacturers and suppliers). That leaves FXD extremely vulnerable to slack economic data.

Commodities

Events

After-Hours Center

iShares Dow Jones US Technology Sector Index Fund

MSFT

4 ETFs For Q2 Earnings Season (FXD, IYW, XLB)

The final June reading of the University of Michigan Consumer Sentiment Index is due out this morning and even if it meets the consensus estimate of 74.4, that would be the lowest tally of 2012. The June number would also be about five points below the May reading.

Potentially making matters worse for discretionary stocks and ETFs is Thursday's spate of bad after-hours news. Shares of Ford (NYSE: <a class="ticker" href="/stock/f#NYSE">F</a>), the second-largest U.S. car maker, fell almost three percent in Thursday's after-hours session after the company said in an SEC filing that's second-quarter loss pretax loss for operations in Asia, Europe and South America could reach $570 million.

That is nearly triple Ford's first-quarter pre-tax loss in those regions. Ford's international woes serve as one reminder that U.S. companies are far from insulated from a slowing global economy. 

The other reminder came courtesy of Nike (NYSE: <a class="ticker" href="/stock/nke#NYSE">NKE</a>), the world's largest maker of athletic footwear, post its first decline in quarterly profits since 2009. Shares of Nike plunged 12.5 percent in Thursday's after-hours session. Nike said it has too much inventory in China. Nike's Asia-Pacific problems could imply the same for other discretionary names with heavy exposure to the region.

That is potentially toxic news for the Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>). With $3.2 billion in assets under management, XLY is the largest discretionary ETF. Ford and Nike combine for over five percent of XLY's weight, but the ETF is loaded with other companies that are increasingly dependent on China for sizable portions of revenue.

Starbucks (NASDAQ: <a class="ticker" href="/stock/sbux#NASDAQ">SBUX</a>) and Yum Brands (NYSE: <a class="ticker" href="/stock/yum#NYSE">YUM</a>) combine for another 5.2 percent of XLY's weight. Those are two stocks U.S. investors have used as ways of tapping into Chinese economic. It cannot be forgotten that McDonald's (NYSE: <a class="ticker" href="/stock/mcd#NYSE">MCD</a>), the world's largest fast-food chain, is XLY's top holding at almost seven percent of the fund's. 

Nike's poor effort in the earnings confessional and the company's China issues could also prove problematic for another ETF: The SPDR S&amp;P Retail ETF (NYSE: <a class="ticker" href="/stock/xrt#NYSE">XRT</a>). Nike is not one of the $617.6 million fund's 98 holdings. Dick's Sporting Goods (NYSE: <a class="ticker" href="/stock/dks#NYSE">DKS</a>), Finish Line (NASDAQ: <a class="ticker" href="/stock/finl#NASDAQ">FINL</a>) and Foot Locker (NYSE: <a class="ticker" href="/stock/fl#NYSE">FL</a>) are. Those are major sellers of Nike products and they account for over three percent of XRT's weight.

Beyond the Nike problem, XRT has a slight China conundrum of its own. Like XLY, XRT features a small allocation to Tiffany (NYSE: <a class="ticker" href="/stock/tif#NYSE">TIF</a>). The Asia-Pacific region is critical for Tiffany and the company already had to pare earnings estimates earlier this year. Further weakness in China could be create more problems the company behind the little blue box.

Another ETF that could be hampered by the slowing global economy is the First Trust Consumer Discretionary AlphaDEX Fund (NYSE: <a class="ticker" href="/stock/fxd#NYSE">FXD</a>). FXD is not excessively to one or two stocks. Comcast (NASDAQ: <a class="ticker" href="/stock/cmcsa#NASDAQ">CMCSA</a>) is the fund's largest holding with a weight of just 1.5 percent. 

Under normal circumstances, an ETF that spreads its weight around its lineup the way FXD implies investors are protected from stock-specific risk. Dicks, Ford, Starbucks, Yum, Nike and Foot Locker all make a home in FXD. 

FXD is home to other major discretionary plays that could be hit on the China news as well, including GM (NYSE: <a class="ticker" href="/stock/gm#NYSE">GM</a>), Las Vegas Sands (NYSE: <a class="ticker" href="/stock/lvs#NYSE">LVS</a>) and Coach (NYSE: <a class="ticker" href="/stock/coh#NYSE">COH</a>). Traders have already hit FXD, sending the ETF down almost 12.6 percent in the past three months, a performance that is more than 800 basis points worse than XLY's.
	
For more on sectors ETFs, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/06/2673160/goldman-highlights-etf-correlations-xlf-xlk-xlu">here</a>.

Comments

First Trust Cons. Discret. AlphaDEX

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Ultime notizie per First Trust Cons. Discret. AlphaDEX (ARCA:FXD)

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