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ETFs & Stocks to Shower Gains This Thanksgiving Week

Heading into the Thanksgiving week, history shows that the holiday-shortened week is a bullish feast for stock investors, even with low volumes.

Per Schaeffer's Investment Research, the S&P 500 returned an average of 0.67% during Thanksgiving week over the past 50 years and the week is positive 70% of the time. The outperformance generally comes the day before Thanksgiving and the day after. The Wednesday before Thanksgiving has been positive 78% of the time, averaging a gain of 0.30% while the day after Thanksgiving has averaged a 0.26% return over the past 50 years, being positive 70% of the time (read: 5 Top-Ranked Growth ETFs & Stocks to Tap Post Mid-Term Rally).

According to data from Bespoke Investment Group, the index has gained an average of 0.64% during this holiday-shortened week since 1945. In fact, in 2017, the Thanksgiving week was even better with the index gaining 0.76%.

Given the historical trends, this Thanksgiving week is also expected to shower gains. While the U.S.-China trade relations and Brexit have been playing foul on the stock market, a booming economy and better-than-expected earnings are providing a lift to stock prices. This is especially true as the American economy has been on a solid pace of growth with robust job creation, strong GDP growth, a 50-year low unemployment rate, the fastest pace of wage gains in nearly a decade, and rising consumer and business confidence.

While third-quarter GDP growth slowed down to 3.5% from 4.2% in the second quarter amid the mounting headwinds from trade, it marks the best two-quarter stretch in four years. With this, the economy is on pace for the fastest annual growth in 13 years (read: ETFs to Benefit & Lose From a Strengthening Dollar).

Meanwhile, Q3 earnings for 91.2% of S&P 500 members that have reported results are up 26.2% from the same period last year on 8.8% higher revenues, with 78.5% beating EPS estimates and 63.6% beating revenue estimates. This is better than earnings growth from this group of companies in other recent periods though revenue growth represents a deceleration relative to the recent past.
 
Food, Beverage & Transportation: Hot Spots

While many corners of the stock world will see a rally, food and beverage, and transportation stocks will likely take charge. According to the latest data from the American Farm Bureau Federation, the average cost of serving 10 people for Thanksgiving is expected to drop 22 cents from last year to $48.90 thanks to declining farm prices, including the most-happening food ––turkey. The average cost of Thanksgiving dinner has declined steadily since 2015 and is now at the lowest level since 2010.

According to travel service provider AAA, thanksgiving holiday travel is expected to hit the highest level since 2005. As many as 54.3 million Americans will travel 50 miles or more this Thanksgiving weekend (Nov 21-Nov 25), up 5% from last year. Of them, 48.5 million (up 5% from the last year) will go on road trips, 4.27 million (up 5.4%) will fly, and the remaining 1.48 million (up 1.4%) will travel by trains, buses and cruises.

Notably, a report from the U.S. airlines group, Airlines for America (A4A), shows that a record 30.6 million passengers will fly over the 12-day Thanksgiving holiday travel period (Nov 16-Nov 27), up from 29 million last year (read: Transport ETFs & Stocks to Surge on Busy Thanksgiving Travel).

As a result, investors seeking to cash in on the Thanksgiving week for big gains could consider the following ETFs & stocks. Thanksgiving celebration is mainly about eating and dining with families:

ETFs

While a few of these are Sell-rated ETFs, investors should note that these could get a boost this week on Thanksgiving excitement.

Direxion Daily S&P 500 Bull 3x Shares SPXL

This fund makes an excellent pick for investors seeking to make large profits from the soaring stock market in a very short span. The fund creates a triple leveraged long position in the S&P 500 index while charging 95 bps in fees a year. It has $1 billion in AUM and trades in heavy volume of 3.5 million shares on average.

Invesco Dynamic Food & Beverage ETF PBJ

This product offers exposure to 29 stocks that are engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index. With AUM of $74.8 million, the fund charges 63 bps in annual fees from investors and sees a light average daily volume of 7,000 shares. It has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.

U.S. Global Jets ETF JETS

This fund provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 34 securities and charges 60 bps in annual fees. It has gathered $91.3 million in its asset base while sees moderate trading volume of nearly 23,000 shares a day. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Oil Price on Longest-Ever Losing Streak: 5 ETF Zones to Benefit).

iShares Dow Jones Transportation Average Fund IYT

The ETF follows the Dow Jones Transportation Average Index and offers exposure to the broad transportation sector. The fund holds a small basket of 20 stocks with air freight & logistics, railroads, and airlines taking the top three spots. The fund has accumulated $696.4 million in its asset base while sees a good trading volume of around 216,000 shares a day. It charges 43 bps in annual fees and has a Zacks ETF Rank #3 with a High risk outlook (read: Transport ETFs Look Bright Post Solid Q3 Earnings).

Stocks

While there are several stocks in the food, beverage and transportation spaces that could spike on Thanksgiving, we have outlined few of those that have Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 and a positive earnings estimate revision over the past one month or a positive estimated earnings growth estimate.

Hormel Foods Corporation HRL

This Minnesota-based company produces and markets various meat and food products in the United States and internationally. It is expected to see earnings growth of 4.55% for the holiday quarter and has a Zacks Rank #3.

Spirit Airlines Inc. SAVE

This Florida-based company provides low-fare airline services. The company has seen solid earnings estimate revision of 8 cents over the past 30 days for the holiday quarter. The stock has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Habit Restaurants Inc. HABT

This California-based company is a burger-centric fast casual restaurant engaged in preparing char-grilled burgers, sandwiches and salads. The stock has seen rising earnings estimate by a penny over the past month for the holiday quarter and sports a Zacks Rank #1.

CSX Corporation CSX

This Florida-based premier transportation company provides rail, intermodal, and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural and consumer products. Its earnings are expected to grow 56.2% for the holiday quarter. The stock has a Zacks Rank #1 (see: all the Industrials ETFs here).

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