From Zacks: The month of November normally remains upbeat for Wall Street. In the last five November months, the S&P 500 witnessed returns of 3.42%, 0.05%, 2.45%, 2.80% and 0.28%, respectively, as per Ycharts.com. This year should not be an exception with market momentum being steady.
The month opened up with an ultra-important news of Trump pitching for Jerome Powell as the next Fed chair. Plus, talks about Trump’s tax reform is rife with both the Senate and the House passing the budget blueprint, though by a slim margin.
Also, the month marks the start of holiday-season buying with loads of sales-boosting events like Thanksgiving, Cyber Monday and Black Friday. Meanwhile, geopolitical tensions between North Korea and the United States seem to have ebbed a bit.
All these make it more important to pin point ETFs that could shower gains on investors in November.
Electronics will likely be the top 2017 Black Friday bargains, as per analysts. Salesforce expects Black Friday to be “the busiest digital shopping day” in the history of the United States, surpassing Cyber Monday, as the U.S. digital shopping day for the second consecutive year (read: 3 ETFs to Tap Upbeat Electronics Sales Forecast).
Apple (AAPL – Free Report) also provided an upbeat outlook for the holiday shopping season. Helped by rising iPad and Mac sales, the 10-year anniversary iPhone will likely lead revenues to a record high of $84 billion to $87 billion in the quarter ending December, as per Apple. This makes it important to look at IYW. Apple occupies the top position in the basket with 16.8% of assets, followed by Microsoft (12.4%) and Facebook (8.32%).
Who can forget a Thanksgiving spread? November means feasting on turkey and mashed potatoes. Moreover, consumer price index for food away from home is going to be higher than food at home in 2017 and 2018. These factors put PBJ, which offers exposure to stocks engaged in the manufacture, sale or distribution of food and beverage products as well as agricultural products, in the spotlight. After all, the fund holds a number of restaurant stocks.
The National Retail Federation expects retail sales to grow between 3.6% and 4%, totaling $678.75 billion to $682 billion in the November-December period. Also, the International Council of Shopping Centers sees a 3.8% uptick in retail sales. Deloitte sees this figure going higher to 4% to 4.5% (without considering cars and gasoline).
Plus, October job data may rebound as the economy left the ill impact of hurricanes behind. Healthy job market and a growing economy may lead consumers to make the most of deals and discounts offered by retailers for Thanksgiving, Black Friday and Cyber Monday.
With Powell being nominated by President Trump as the next Fed chair, financial stocks and ETFs are up for gains. First, Powell is in favor of rising rates and plus he intends to revise the Volcker Rule for an easier version, as per a fortune.com article. So, easing regulations and chances of tax reforms should help financial ETFs (read: Powell to Lead Fed: Best ETF Strategies).
The U.S. Commerce Department reproached Canada for unethically subsidizing and dumping softwood lumber in the United States and thus “set final duties on imports“. The overall final duty rates range from about 10 to 24%. Plus, demand for lumber is likely to shoot up amid hurricane-recovery efforts and increased house building and remodeling. This should boost funds like WOOD (read: ETF Winners and Losers on Trump’s Canadian Timber Tariff).
The greenback has turned around lately with an uptick in the economy and hopes of Trump’s tax reform. If the dollar gains ahead, currency-hedged foreign ETFs are likely to gain traction. This is because, several developed economies are still practicing easy money policy. So, funds like HEFA are likely to be good bets (read: Dollar Rebounds: 5 ETFs to Cash in On).
As per an article published on Reuters, “the busiest Thanksgiving travel period in more than a decade” could benefit airlines stocks. In any case, DJ Transport index including airlines enjoys seasonality in November, as per equityclock.com (read: Will Airline ETF Crash on Subdued Q3 or Take Off on Value?)
The iShares Dow Jones US Technology ETF (IYW) closed at $163.06 on Friday, up $1.44 (+0.89%). Year-to-date, IYW has gained 36.27%, versus a 16.69% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Zacks Research.