Retail stocks are leading the market higher as we exit a strong holiday season. The retail sector ETF (XRT) is up 1.2% today at a 52-week high while the S&P 500 trades flat.
MasterCard Advisors SpendingPulse reported holiday sales grew 4.9% year-over-year. This number excludes automobiles and represents the highest growth rate since 2011. E-commerce sales grew 18%. Last year, sales were up 3.7% over the same time period (November though Christmas Eve).
The holiday season was expected to be good for retailers -- the consumer is the strongest it has been in years. Retail sales grew 3.5% to a new all-time high in November. December retail sales data from the U.S. Census Bureau will be released on Friday, January 12.
We will hear from many retailers before that. The annual ICR retail conference takes place from January 8-10 in Florida and most retailers will present and announce holiday sales and/or update guidance for the fourth quarter at the event.
Retail stocks have generally been strong since the group reported better than feared third quarter results in November. Sentiment was very poor around the group for most of 2017 (and in recent years) as Amazon is perceived to be eating almost everyone in the sector's lunch. A recent rotation by market participants in to value stocks and away from growth has been a tailwind. Last week, another tailwind came in the form of tax cuts for both corporations and consumers.
Retail stocks that hit a 52-week high today:
- Kohl's (KSS), Abercrombie & Fitch (ANF), American Eagle (AEO), Boot Barn (BOOT), Gap (GPS), The Children's Place (PLCE), Urban Outfitters (URBN), Best Buy (BBY), lululemon (LULU), Ollie's Bargain Outlet (OLLI), Burlington (BURL), Canada Goose (GOOS) and Ross Stores (ROST)
Retail sector strength today:
- JCP +8.28% FOSL +7.99% FINL +7.39% HIBB +5.23% KSS +4.94% CHS +4.90% EXPR +4.89% M +4.50% VSI +3.66% ANF +3.96% DDS +3.67% GME +3.55% FL +3.51% TLRD +3.51% FIVE +3.24% PLCE +3.06% BBBY +2.90% DSW +2.99% SIG +2.90% AEO +2.81% DKS +2.63% ODP +2.62% GCO +2.45% BOOT +2.45% JWN +2.36% GES +2.40% ASNA +2.49% SCVL +2.19% URBN +1.96%