Invesco S&P SmallCap Consumer Discretionary ETF

PSCD

Market cap $21.7M

American consumers are rerouting their spending rather than pulling back. With University of Michigan sentiment at 48.2, the savings rate down to 3.6% from 5.1% in early 2025, and energy prices up 14.4% year-over-year, households are making rational adjustments: buying private label at Costco, hunting TJX racks for branded apparel, fixing the old Hyundai instead of financing a new one, and listing the kids' outgrown clothes on eBay.

Thanksgiving shopping is set to boost retail and tech ETFs. XRT, IBUY, ONLN, IPAY, BPAY and PSCD could be the biggest winners of the holiday spending boom.

PSCD offers exposure to small-cap consumer discretionary stocks, with the bulk of the holdings comprising specialty retailers and those involved in household durables. PSCD suffers from high volatility, an uncomfortable tracking error, and a dispiriting track record (both short and long-term) of risk-adjusted returns. Current sector fundamentals are weak, with declining retail sales, limited consumer spending appetite, and potential inventory build-up.

Raise a toast to the ETFs in these sectors and find some hidden luck in this Irish festival.

Holiday spending is expected to grow 2.5%-3.5% year over year. Several ETFs are poised for solid gains.

Black Friday continues to be the most popular shopping day for both in-store and online shopping.

Investors seeking to cash in on big gains could consider ETFs from areas likely to benefit from the Thanksgiving week.

To date, 145 of the 199 companies in our Retail/Restaurant Index have reported their EPS results for Q2 2024, representing 73% of the index. The blended revenue growth estimate for the 199 companies in this index is 3.5% for Q2 2024. Home Depot reported better-than-expected Q2 earnings and revenue.

President Joe Biden ended his presidential campaign on Sunday and announced his endorsement of Vice President Kamala Harris as the Democratic nominee for president.

We have highlighted five ETFs from different zones that have plunged the most in the couple of weeks but have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).