NEW YORK (
) -- Don Dion posts his current insights on the stock, bond, commodity and currency markets in his
blog, anticipating which ETFs will be in play next.
Here are three of his blog posts from the past week:
Transports Get Back on Track
Published 6/22/2011 10:23 a.m. EDT
It has been a tough few weeks for transports, but today's
(FDX - Get Report)
results could be an indication that the sector is changing course. After stumbling 2.6% in the one-month period ending June 21, the popular
iShares Dow Jones Transports ETF
is getting back on track: Despite the recent pullback, IYT has gained more than 21.5% in 2011.
Earnings from FedEx give us some insight into why this sector is heating up. Despite high fuel costs, FedEx saw a 33% increase in earnings during its fiscal fourth quarter as the company implemented fuel surcharges for customers.
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FedEx isn't the only transport company trying to make lemonade out of the lemons of volatile fuel prices. Airlines, which are also represented in the IYT portfolio, have been increasing costs, fees, and surcharges.
Having weathered a broader market slide, transports could head even higher in the second half of 2011 and beyond. With fuel prices dropping, transport firms could see increased routes and higher volume. In its earnings announcement today FedEx Chairman Frederick W. Smith noted that "FedEx is well positioned to deliver strong earnings growth in fiscal 2012."
IYT is a highly liquid fund that offers ample exposure to big names in the transport industry. FedEx makes up a hefty 9% of holdings. Even though IYT is top-heavy, it is a liquid way to gain exposure to transport gains, as long as longer-term investors keep an eye on top holdings and overall asset exposure.
At the time of publication, Dion Money Management had no positions in stocks mentioned.