4 Solid ETF Ideas To Follow This December

After capping the strongest monthly performance since June, Wall Street is facing dual headwinds of an escalation in trade tensions and bouts of weak data, which signal slowing economy in the crucial holiday shopping season.

This is especially true as President Trump is planning to restore tariffs on steel and aluminum imports from Brazil and Argentina and proposed tariffs of up to 100% on $2.4 billion worth of French products. Also, trade talks between Washington and Beijing have stalled as Trump said that he will wait until the November 2020 election to strike a deal. The President previously touted that he will impose tariffs on Chinese goods from Dec 15, as announced, if the deal is not reached. This has dented hopes of ending the lingering trade war, resulting in risk-off sentiments.

Meanwhile, latest data shows that the U.S. manufacturing sector contracted for the fourth straight month in November with a steep drop in new factory orders. U.S. construction spending also unexpectedly fell in October as investment in private projects tumbled to its lowest level in three years.

However, the strong start to the holiday season paints an upbeat economic picture. The burst of heavy discounts and promotional deal has been paying off retailers both in-stores and online. About 190 million consumers shopped between Thanksgiving and Cyber Monday, according to the National Retail Federation (“NRF”). This is up 14% from last year’s figure. Out of these, more than 124 million consumers shopped in stores during the holiday weekend.

Per Adobe, online sales jumped 14.5% year over year to a record $4.2 billion on Thanksgiving. Black Friday and Small Business Saturday also witnessed record figures of $7.4 billion, up 20%and $3.6 billion, up 18%, respectively. Notably, Thanksgiving sales surpassed $4 billion for the first time ever. Cyber Monday also broke another record by raking in $9.4 billion in online sales.

Further, the stock market has entered a typically strong period. December has historically been the strongest month of the year despite the S&P 500 dropping more than 9% last year after months of selling. According to Sam Stovall, chief investment strategist at CFRA, the S&P 500 gained 1.6% on average with positive movements in 76% of the time.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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