The dot com boom and the real estate bubble gave consumers confidence and a way to spend like it would never end.  The bubbles have burst and deleveraging is taking a toll on consumers.  We can no longer sell our Qualcomm stock for $500/share or swipe our ATM card through our home as many did for the last 10 years.  Where will consumer spending come from for the next ten years?

Approximately 30% of US household wealth was destroyed by the real estate collapse and the 2008 stock market crash.  Currently it stands at about $15 trillion, down 30% from $22 trillion at the 2007 peak.  With consumer household debt at approximately $13 trillion, this leaves us with $2 trillion in assets.  The debt burden is taking a toll on the consumer as home values continue to fall and banks cut their credit limits.  The consumer would rather save than spend as it deals with a lack of assets.

Markets have been pricing a recovery in consumer spending which accounts for 70% of GDP but, retail sales last month disappointed.  The commerce department reported today that retail sales fell 0.1 percent last month as economists had expected a gain of 0.7 percent.  All eyes will be on the fall retail spending as back to school shopping accounts for much of retail sales.  The SPDR S&P Retail (XRT) which comprises of approximately 60 stocks that follow the US retail market has enjoyed 50% gains since it’s November 2008 low. 

Here is a list of the top 10 companies listed within the ETF below:

• CHICO’S F A S INC (CHS)
• COLLECTIVE BRANDS (PSS)
• Expedia, Inc. (EXPE)
• GAP INC (GPS)
• GUESS INC. (GES)
• Gymboree Corporation  (GYMB)
• J CREW GROUP INC. (JCG)
• PENNEY J C CO HOLDIN (JCP)
• LIMITED BRANDS INC (LTD)
• RADIOSHACK CORP (RSH)

Investors may looking to book some profits after today’s retail numbers, and the UltraShort Consumer Services ProShares (SCC) & UltraShort Consumer Goods ProShares (SZK) bet against the consumer.

GET A FREE TREND ANALYSIS  FOR ANY ETF HERE!

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Related posts:

1. Holiday Retail Sales Set To Slide Amid High Unemployment and Low Consumer Confidence (XRT, XLY, FXD, RTH)
2. Consumer Staples AlphaDEX Fund: Crushing The Competition In The Consumer ETF Space (FXG, XLP, PG, PM, KO)
3. ETFs Good or Bad? Dick Grasso Weighs In
4. EGShares Launches Fourth Emerging Markets Consumer Fund with ETF Targeting India’s Leading Consumer Companies (INCO)

ETF BASIC NEWS, SCC, SZK, XRT