Consumer Discretionary Select Sector SPDR Fund

XLY

Market cap $23.4B

XLK and other sector ETFs set to gain as expectations surge for a potential Federal Reserve rate cut in December.

Last week's economic landscape was defined by conflicting signals from key indicators, suggesting a growing divergence between investor behavior and underlying consumer health. Margin debt surged to a new high while consumer confidence simultaneously fell to near-historic lows.

Cautious consumers, strong goods demand! ETFs to watch this holiday season: likely winners XLY, ONLN, BPAY, CHAT, likely laggards EATZ, AWAY.

Last week's economic data sent mixed signals. Consumer sentiment plummeted to a near-record low on economic anxiety, and the manufacturing sector continued its long contraction.

The Consumer Discretionary Select Sector SPDR Fund ETF (XLY) earns a Hold rating due to high concentration in Amazon and Tesla, limiting diversification. XLY's top two holdings, AMZN and TSLA, account for ~46% of the portfolio, amplifying idiosyncratic risk and reducing thematic purity. Valuation concerns, macro headwinds, and skepticism on TSLA's growth prospects further cap XLY's risk-adjusted return potential.

Matt Camuso, Head of ETF Solutions at BNY Investments, says there are $13 trillion of assets in ETFs. That's compared to $5 trillion a year prior.

Fed rate cuts, trade truce & holiday cheer should boost markets! Some ETFs to buy now include SPHB, XLY, XSW, ITA & IWM.

Anna Paglia, State Street Investment Research CBO and chief business officer, joins CNBC's Dom Chu on the type of assets and ETFs State Street is seeing the flows into. She also shares why the firm is going against the trend by moving into mutual funds.

Last week's economic narrative centered around the Federal Reserve's latest rate cut, a decision complicated by the government shutdown and lack of economic data. Other reports from the week showed a third straight drop in consumer confidence and a continued slowdown in U.S. home prices.

Amazon's cloud business knocked it out of the park and CEO Andy Jassy hinted that the unit is gaining momentum heading into the next few months giving him 'significant confidence' he said.