US Retail Sales Surge in July, Boosting Electronics, Healthcare, and Food Sectors

Retail sales in the United States experienced a notable 1% sequential increase in July 2024, following a downwardly revised 0.2% drop in June. This growth surpassed forecasts of a 0.3% gain and represents the largest increase since January 2023. The surge was fueled by robust performance in several key sectors, with sales at motor vehicle and parts dealers leading the way with a 3.6% rise. Electronics and appliance stores followed closely with a 1.6% increase.

Excluding food services, auto dealers, building materials stores, and gasoline stations, sales still climbed 0.3%, surpassing the June figure of 0.9% and exceeding forecasts of 0.1%. This positive trend points to a healthy consumer spending environment, which is a key indicator of overall economic health.

Winning Areas

Electronics & Appliance Stores:

Sales in this category rose 1.6% sequentially in July and 5.2% year-over-year. This upward trajectory is likely to boost semiconductor funds and stocks, as demand for electronics continues to grow.

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VanEck Vectors Semiconductor ETF (SMH):

This ETF tracks the performance of companies involved in semiconductor production and equipment. The fund charges 35 basis points (bps) in fees.

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Best Buy (BBY):

A multinational specialty retailer of consumer electronics, home office products, entertainment software, and more, Best Buy offers investors a potential play on the growing electronics market. The fund has a Zacks Rank #2 (Buy).

Healthcare & Personal Care Stores:

Sales in this sector saw a 0.8% sequential increase in July and a 3.4% year-over-year rise.

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Consumer Staples Select Sector SPDR ETF (XLP):

This ETF represents the consumer staples sector of the S&P 500 Index. The fund charges 9 bps in fees.

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Kimberly-Clark Corporation (KMB):

A global manufacturer and marketer of consumer products, Kimberly-Clark offers a diversified approach to the healthcare and personal care market. The fund has a Zacks Rank #3.

Food & Beverage Stores:

Sales in this category climbed 0.9% sequentially in July and 2.9% year-over-year.

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Fidelity MSCI Consumer Staples Index ETF (FSTA):

This ETF tracks the performance of the consumer staples sector in the U.S. equity market. The fund charges 8 bps in fees.

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Pilgrim’s Pride Corporation (PPC):

Focused on strengthening its Prepared Foods category, Pilgrim’s Pride is well-positioned to benefit from continued growth in this segment. The fund has a Zacks Rank #1 (Strong Buy).