For investors seeking momentum, SPDR S&P Retail ETF XRT is probably on the radar. The fund just hit a 52-week high and is up 34.65% from its 52-week low price of $63.01/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:
XRT in Focus
The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The retail index is a modified equal-weight index. The product charges 35 bps in annual fees (see: All Consumer Discretionary ETFs).
Why the Move?
The retail corner of the broad stock market has been an area to watch lately, given the dovish stance of the Fed, and interest rate cuts in September and November, resulting in increase in discretionary spending by the consumers. Market expectation of another interest rate cut in December is acting as a key tailwind for the fund.
U.S. retail sales in October rose slightly above expectations, driven by increased household spending on motor vehicles and electronics. The upcoming holiday season also bodes well for the sector.
More Gains Ahead?
Currently, XRT has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. However, it might continue its strong performance in the near term, with a positive weighted alpha of 26.24 (as of Barchart.com), which gives cues of a further rally.
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SPDR S&P Retail ETF (XRT): ETF Research Reports
