PowerShares Dynamic Retail (PMR - commentary - Trade Now) was flat on light trading heading into the close after several retailers reported better-than-expected results. No. 2 holding TJX (TJX - commentary - Trade Now) reported a June same-store sales gain of 4% as investors turn to discount retailers. The news lifted shares close to 3%.
Other retailers were not so lucky with their same-store sales. Target (TGT - commentary - Trade Now) reported a 6.2% sales drop but also said cost-cutting would help it hit earnings targets. Shares of TGT are up more than 3%. Abercrombie & Fitch (ANF - commentary - Trade Now) reported a 32% decline in June same-store sales, sending its shares off by more than 4%.
Another way to play the sector is through the SPDR Retail (XRT - commentary - Trade Now) ETF. PMR underperformed XRT from the March lows because PMR had held up much better during the market crash. A quick check of momentum shows that PMR is still losing long-term positive momentum, but investors have shifted their selling from retailers to materials, solar and other recently hot ETFs. Furthermore, over the past two weeks, PMR is up more than 1%, along with health care, bonds, consumer staples and some international ETFs.
P.S. Will you be there when Cramer makes his next move?
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ETFs The Pope Takes on Capitalism 7/9/2009 1:18 PM EDT Does his condemnation extend to the so-called religious ETFs recently proposed?
At the time of publication, Dion had no positions in the stocks mentioned.
Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.
Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
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