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Options Wednesday: A Comparison of Implied Volatility of the US Retail Sector

Nov 07, 2018

The Data Daily: Where the charts tell the story

This week's Options Wednesday focuses on a comparison of implied volatility of the US retail sector,

 

After reviewing the graphs below, we highlight:

  • Spikes in 30-day implied volatility can be observed for S&P US Retail ETF (XRT) and bellweather US retail stocks like Wal-Mart (WMT), Kroger (KR), Amazon.com (AMZN), Costco Wholesale (COST), and Home Depot (HD
  • The US retail sector has been supported by the improving position of US consumers with wage growth at 3.5%, having risen from 2.9% at the end of 2017 as well as hourly earnings growth of 3.1%, up from 2.3% in the fourth quarter of 2017.
  • Consumers have also benefitted from solid job growth, where the US saw 250k jobs added in the last change in non-farm payrolls report, average about 220k over the last year, up from 20k in the fourth quarter of 2017.
  • Despite strong developments for consumer, retail sales growth less autos and gas have decelerated to almost no change Y/Y over the past few months.

 

Retail Sector - SPDR S&P Retail ETF (XRT)

Walmart Inc. (WMT) - Rated "Top Buy" in our US Consumer Staples Global Top Stock Ideas

Kroger Inc. (KR) - Rated "Neutral" in our US Consumer Staples Global Top Stock Ideas

Amazon (AMZN) - Rated "Top Buy" in our US Consumer Discretionary Global Top Stock Ideas

Costco Wholesale Corporation (COST) - Rated "Neutral" in our US Consumer Staples Global Top Stock Ideas

The Home Depot, Inc. (HD) - Rated "Top Buy" in our US Consumer Discretionary Global Top Stock Ideas