Despite record inflation, consumers continue to shop

As inflation hit its highest point in four decades, consumers spent more in June on a range of more expensive goods and services like gas, groceries, furniture and even restaurants.

In a sign that consumer spending habits remain resilient amid record inflation and the continuing COVID-19 pandemic, the Commerce Department reported on Friday that U.S. retail sales rose 1.0 % in June. The report also showed that a drop in May was slightly lower than previous estimates.

“The consumer has the ability to manage these price increases,” Michelle Meyer, chief U.S. economist at the Mastercard Economics Institute, told The Wall Street Journal. “But there is clearly some frustration.”

After retail spending beat forecasts, US stocks rebounded on Friday, ending a volatile week. The S&P 500 gained 1.7% on Friday afternoon, while the Nasdaq Composite rose 1.4% and the Dow Jones Industrial Average rose 1.9%.

The resilience of the American buyer to more expensive things can impact exchange-traded funds that focus on consumer goods like Invesco S&P 500 Consumer Discretionary (RCD) Equal Weight ETFthe Invesco S&P 500 Equal Weight Consumer Staples ETF (Right)and the Invesco DWA Consumer Cyclicals Momentum ETF (PEZ).

The RCD, which tracks the S&P 500 Equal Weight Consumer Discretionary Index, provides exposure to the consumer discretionary sector of the domestic economy, making it an available option for investors implementing sector rotation strategies or seeking to tilt the exposure towards a high-beta industry, according to VettaFi.

RHS tracks the S&P 500 Equal Weight Consumer Staples Index. provides exposure to the consumer staples sector of the US economy, making it an available option for investors implementing sector rotation strategies or looking to tilt exposure to a low-beta industry, may -be in anticipation of a bear market.

Both the RCD and RHS are pegged to equally weighted indices, meaning that the companies within it receive roughly equal allocations.

PEZ tracks the Dorsey Wright Consumer Cyclicals Technical Leaders Index. This index uses a unique methodology that could make the exchange-traded fund an ideal sector as the reduction accelerates.

“The index is designed to identify companies that exhibit relative strength (momentum) and is comprised of at least 30 stocks from the benchmark NASDAQ US index,” according to Invesco. “Relative strength is the measure of how well a stock has performed in a given universe over time relative to the performance of all other stocks in that universe.”

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.