Core Insights - The Fidelity MSCI Consumer Discretionary Index ETF (FDIS) has shown a 3% increase at the start of 2026 after a 7% gain in 2025, but it has underperformed the broader market while maintaining a low annual fee of 0.084% [1] Group 1: Fund Performance and Composition - FDIS provides concentrated exposure to consumer discretionary stocks, with 97.7% of its portfolio in this sector, and nearly 40% of its assets are in Amazon (21%) and Tesla (18.28%) [2] - The performance of FDIS is significantly influenced by the contrasting stock movements of Amazon, which is up nearly 6% year-to-date, and Tesla, which has declined by 3.75% [2] Group 2: Economic Indicators and Consumer Spending - Consumer spending growth is projected to slow to 2% in 2026 from a historical average of 2.7%, which is critical for consumer discretionary stocks as they rely heavily on discretionary income [5] - The probability of a recession has decreased from 32% to 23.5% recently, indicating a potential soft landing for the economy, which is a positive sign for FDIS investors [6] Group 3: Company-Specific Challenges - Tesla's earnings have faced a significant decline, with a 63.8% drop in annual earnings per share in 2025, falling from $2.32 to $0.84, and a substantial miss in Q1 2025 earnings estimates [7]

Core Insights - Recent inflation data and comments from Fed officials have increased expectations for interest rate cuts, with markets now pricing a 25.5% likelihood of rates being lowered to 3.25-3.5% by January 2026, up from 15.3% a month earlier [1] Inflation Data - Softer U.S. inflation data has strengthened expectations for two or more Fed rate cuts in the coming year, with November's underlying inflation growing at the slowest pace since early 2021 and headline CPI rising 2.7% year over year, below forecasts [2] Fed Leadership and Rate Cuts - Comments from President Trump suggest that the next Fed chair will favor lower interest rates, contributing to market bets on additional rate cuts next year [4] - Fed Governor Christopher Waller indicated that the Fed has room to ease interest rates, citing signs of weakening in the labor market, and suggested that any additional cuts might occur at a moderate pace [5] Financial Sector Impact - Anticipated Fed interest rate cuts in 2026 are expected to provide a significant boost to the financial sector, as lower rates could reduce capital costs for banks and enhance loan activity [7] - The Dow Jones U.S. Financial Services Index has gained 19.70% over the past year and 2.41% month to date, indicating strong performance in the sector [8] Consumer Discretionary Sector - Lower interest rates are expected to improve consumer access to credit and boost spending power, positively impacting profit margins in the consumer discretionary sector, which has seen a 7.17% increase year to date and 2.47% month to date [10] Small-Cap Stocks - Small-cap stocks, which rely heavily on external borrowings, are likely to benefit significantly from lower interest rates, allowing for increased capital availability and refinancing of existing debt at cheaper rates [12]

Core Viewpoint - The Fidelity MSCI Consumer Discretionary Index ETF (FDIS) is a passively managed ETF that provides broad exposure to the Consumer Discretionary sector, appealing to both retail and institutional investors due to its low costs and tax efficiency [1][3]. Group 1: ETF Overview - FDIS was launched on October 21, 2013, and has accumulated over $1.85 billion in assets, making it one of the largest ETFs in its category [3]. - The ETF aims to match the performance of the MSCI USA IMI Consumer Discretionary Index, which reflects the U.S. consumer discretionary sector [3]. Group 2: Cost Structure - FDIS has an annual operating expense ratio of 0.08%, making it the least expensive option in its category [4]. - The ETF offers a 12-month trailing dividend yield of 0.76% [4]. Group 3: Sector Exposure and Holdings - The ETF is fully allocated to the Consumer Discretionary sector, with Amazon.com Inc (AMZN) representing approximately 23.76% of total assets [5][6]. - The top 10 holdings constitute about 58.79% of total assets under management [6]. Group 4: Performance Metrics - As of July 28, 2025, FDIS has increased by approximately 21.88% over the past year and has a year-to-date gain of about 0.27% [7]. - The ETF has traded between $75.33 and $104.24 in the last 52 weeks, with a beta of 1.29 and a standard deviation of 23.15% over the trailing three-year period, indicating medium risk [7]. Group 5: Alternatives - FDIS has a Zacks ETF Rank of 5 (Strong Sell), suggesting it may not be the best option for investors seeking exposure to the Consumer Discretionary sector [8]. - Alternatives include the Vanguard Consumer Discretionary ETF (VCR) and the Consumer Discretionary Select Sector SPDR ETF (XLY), which have larger asset bases and competitive expense ratios [10].

Core Insights - Amazon has launched its longest-ever Prime Day event, expanding from 48 to 96 hours, running from July 8 to 11, with expectations of significant online spending [1][2] - U.S. online sales during this event are projected to reach a record $23.8 billion, marking a 28.4% year-over-year increase [2] - The event's spending is anticipated to be equivalent to the combined online spending of two Black Fridays [2] E-commerce Trends - Amazon is offering millions of discounts across various product categories, with daily deal drops to encourage frequent consumer engagement [4] - Mobile shopping is expected to account for $12.5 billion, or 52.5% of total sales, highlighting the importance of mobile channels for impulse purchases [5] - Discounts across categories are expected to match last year's levels, with apparel at 24%, electronics at 22%, and other categories following [6] Technological Innovations - The use of generative AI-powered shopping assistants and chatbots is expected to increase, with traffic from AI sources projected to surge by 3,200% compared to last year [7] - The Buy Now, Pay Later (BNPL) option is forecasted to rise to 8% of overall online sales during the event, up from 7.6% in 2024 [8] Investment Opportunities - Investors can consider ETFs with significant allocations to Amazon, including ProShares Online Retail ETF (24.5% allocation), Fidelity MSCI Consumer Discretionary Index ETF (24.2%), and others [3][9][10][11][12][13] - ProShares Online Retail ETF has an asset base of $78.3 million, while Fidelity MSCI Consumer Discretionary Index ETF has $1.8 billion [9][10] - Vanguard Consumer Discretionary ETF holds a 22.8% allocation to Amazon and has an asset base of $6.1 billion [11]

Core Insights - Amazon reported stronger-than-expected first-quarter 2025 results, surpassing earnings and revenue estimates but provided a cautious second-quarter operating income guidance due to tariff uncertainties [1][3][6] Financial Performance - Earnings per share reached $1.59, exceeding the Zacks Consensus Estimate of $1.35 and up from 98 cents a year ago [3] - Revenues grew 10% year over year to $155.7 billion, surpassing the consensus estimate of $154.56 billion [3] - Amazon's advertising business was the fastest-growing division, with ad revenues increasing 19% year over year to $13.9 billion [4] - Online store sales grew 6% to $57.41 billion, while Amazon Web Services (AWS) revenues soared 17% year over year to $29.3 billion [4] Future Outlook - For the second quarter of 2025, Amazon expects revenues in the range of $159-$164 billion, with a consensus estimate of $160.46 billion [6] - Operating income is projected to be between $13 billion and $17.5 billion, with a cautious outlook due to uncertain consumer demand influenced by tariff policies [6] Investment Focus - Several ETFs with significant allocations to Amazon include: - ProShares Online Retail ETF (ONLN) with 23.9% allocation to Amazon and $66.3 million in assets [7] - Fidelity MSCI Consumer Discretionary Index ETF (FDIS) with 22.2% allocation and $1.7 billion in assets [8] - Vanguard Consumer Discretionary ETF (VCR) with 22% allocation and $5.3 billion in assets [9] - Consumer Discretionary Select Sector SPDR Fund (XLY) with 21.9% allocation and nearly $19.5 billion in assets [11] - VanEck Vectors Retail ETF (RTH) with 18.1% allocation and $235.9 million in assets [12]