Market Overview

JPMorgan's Retail Analyst: Trump, Warm Weather And The Back Half Of 2016

JPMorgan's Retail Analyst: Trump, Warm Weather And The Back Half Of 2016
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Matt Boss, JPMorgan's retail analyst, was a guest on CNBC Thursday afternoon to offer his take on the state of the retail market. The analyst quickly pointed out that the retail sector has now lapsed the most worrying week of the year with the U.S. election.

"There is no question that some of this uncertainty held the consumer back in the third quarter — it's hard to parse through the noise," he said. "We had really bad weather in the third quarter, it was much warmer year-over-year so that was an aspect for a lot of the apparel retailers."

Meanwhile, the analyst believes that department stores have delivered encouraging earnings reports and the off-price retailers are on deck to report next week.

Boss continued that the retail sector will likely benefit in the fourth quarter and first quarter of 2017 from easy year-over-year compares, especially on the traffic aspect so the sector could see more optimism.

Retailer Sector Post-Election

Boss stated that post-election the retail sector as a whole could benefit from lower corporate tax rates under President-elect Donald Trump, while the consumer could also benefit from a reduction in personal tax rates.

He shied away from offering any specific recommendation but did say that the "inspirational consumer" could be shopping more in 2017.

Relevant ETFs And Trusts

  • VanEck Vectors Retail ETF (NYSE: RTH).
  • SPDR S&P Retail (ETF) (NYSE: XRT).
  • Consumer Discretionary SPDR (ETF) (NYSE: XLY).
  • Guggenheim S&P Equal Weight Consumer Discretionary ETF (NYSE: RCD).
  • Vanguard Consumer Discretionary ETF (NYSE: VCR).
  • PowerShares Dynamic Retail (ETF) (NYSE: PMR).
  • First Trust Cnsmer Disry Alpha Fnd (ETF) (NYSE: FXD).
  • iShares Dow Jones US Consumer Ser. (ETF) (NYSE: IYC).

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