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Honor American Independence with These ETFs

Independence Day celebrations are in full swing ahead of the federal holiday, benefiting several corners of the economy. Let’s find out what the key trends in America are ahead of Fourth of July and how effective these festivities from an investing perspective.

Relish on Food & Drink

Since Fourth of July means party and feasting, agricultural and restaurant-related investments seem prudent. Americans consume about 150 million hot dogs – the most – in the Fourth of July weekend. As per the source, “the term "hot dog" — and the form of sausages we now call hot dogs — is American.” So why not play restaurant stocks and the ETF USCF Restaurant Leaders MENU (MENU) as a fitting tribute to this American favorite?

Overall, Americans are likely to shell out over $7.1 billion on food this year. According to NPD, the most-eaten food is burger. Nielsen data revealed that Americans purchased $804 million of beef before the holiday and $371 million worth of chicken last year (read: Trump Slump to Oil Slide: Top ETF Stories of First-Half 2017).

This bullish trend puts iPath Bloomberg Livestock Subindex Total Return ETN COW and iPath Pure Beta Livestock ETN LSTK in focus. Both products were up about 2% and 0.3% on June 30, prior to the holiday weekend (read: ETFs to Top/Flop as Trump Lays Foundation for Future America).

Beer sales also get a lot of attention on this occasion making Spirited Funds/ETFMG Whiskey&Spirits ETF WSKY WSKY (WSKY) a rosy pick right now. The fund gained about 1.3% on June 30. Since brewers need grains like barley, corn, wheat, millet, and oats to make beer, agricultural investing deserves a mention. Plus, the avocado industry forecaststhat likely consumption of will be around 100.8 million pounds on this July Fourth, almost the same as the year-ago period.

PowerShares DB Agriculture ETF (DBA, Teucrium Corn ETF CORN (CORN) and Teucrium Wheat ETF WEAT added about 2.5%, 2.9% and 5.4%, respectively on June 30. Investors should note that some favorable indications in USDA’s June acreage report also gave a push to agricultural ETFs.

Fourth of July Fireworks Are from China?

As per the source, about 44% of Americans intend to watch fireworks on Tuesday night. Notably, the majority of Independence Day fireworks – over 90% -- come from China. This trend of flying in fireworks to the U.S. puts China ETFs like Global X China Industrials ETF CHII, Global X China Materials ETF CHIM and KraneShares Bosera MSCI China A ETF KBA in focus.

Vacationing Hard

About 33 million Americans are likely to set out on a road trip on the Fourth of July weekend, up from 31 million last year. Better economic conditions and lower energy prices made it easier for Americans. iShares Dow Jones Transportation Average Fund IYT and SPDR S&P Transportation ETF XTN – which were up respectively 0.8% and 0.7% on June 30 – thus are likely to benefit from this trend.

Feeling Patriotic? Play These ETFs

Independence Day celebration is incomplete without the feeling of patriotism. Almost 65% are expected to have an American flag, 53% are estimated to don patriotic themed clothes and about 28% are likely to purchase patriotic items. So, it would be intriguing to bet on some America-specific investments on this occasion. And what could be better than greenback and small-cap ETFs for this?

Investors should note that first-quarter economic growth in the U.S. was revised up to 1.4% from 1.2% reported earlier. Higher consumer spending supported this upgrade. Steady economic improvement will likely make the Fed more comfortable in tightening policies further, which in turn should push up the price of dollar. PowerShares DB US Dollar Bullish ETF UUP gained about 0.2% on June 30 (read: Hawkish Fed Sentiments Put These ETFs in Focus).

This scenario calls for small-cap investing as these funds are closely tied to the U.S. economy and do not have much exposure to the international market. Further, these stocks are not hurt by a strong greenback due to their less focus on global exposure and currency translations. ETFs like Vanguard Small-Cap Growth ETF VBK and iShares S&P Small-Cap 600 Growth ETF IJT look to be decent picks (read: Small Caps Outperform in June: 4 Best ETFs & Stocks).

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PWRSH-DB US$ BU (UUP): ETF Research Reports
ISHARS-TRAN AVG (IYT): ETF Research Reports
ISHARS-SP SC GR (IJT): ETF Research Reports
SPDR-SP TRANSPT (XTN): ETF Research Reports
GLBL-X CHIN MAT (CHIM): ETF Research Reports
GLBL-X CHIN IND (CHII): ETF Research Reports
USCF-RSTRNT LDR (MENU): ETF Research Reports
VIPERS-SC GRWTH (VBK): ETF Research Reports
TEUCRM-WHEAT FD (WEAT): ETF Research Reports
ETFMG-WSKY&SPRT (WSKY): ETF Research Reports
US GLOBAL JETS (JETS): ETF Research Reports
TEUCRM-CORN FD (CORN): ETF Research Reports
PWRSH-DB AGRIC (DBA): ETF Research Reports
IPATH-PB LIVSTK (LSTK): ETF Research Reports
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