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
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.
XLI Poised to Soar
Published 6/21/2011 2:37 p.m. EDT
SPDR Select Industrial ETF
continues to trek upward this afternoon in the wake of positive global trading and news from the Paris Air Show, which is well known among aviation enthusiasts as well as industrial stock traders. The event provides a forum for large firms such as
and Airbus to discuss industry conditions.
Industry insiders have been predicting a good showing for aircraft orders, and Airbus already started on a positive note Monday.
also placed a large order for "new engine option" (NEO) models.
The "NEO" models are designed to address the issue of fuel savings. In a year when oil prices have wildly fluctuated, energy continues to be a hot topic.
The Paris Air Show ends on Sunday, but positive news from top XLI components, including BA and GE, could help to lift the fund higher as the week progresses. The
iShares Dow Jones U.S. Aerospace & Defense ETF
may be a more focused fund, but it lacks the liquidity needed for any kind of short-term trading.
At the time of publication, Dion Money Management had no positions in securities mentioned.
Lap Up Leisure
Published 6/21/2011 2:54 p.m. EDT
I've been bullish on the
PowerShares Leisure and Entertainment ETF
some time, as a weak dollar and recovering global economy is helping to draw both global and U.S. investors to spend more on leisure.
PEJ's holdings include firms such as
In the year-long period ending June 20, the fund gained nearly 20%.
While leisure and entertainment stocks have taken a hit along with the broader market during the last four weeks, signs still exist that global consumers are alive and well.
highlighted recent analysts' comments regarding the Australian gaming industry.
Australians are the world's biggest gamblers, according to the article, which notes, "A report by global gaming-industry consultants H2 Gambling Capital released last month found Australians had the highest annual gambling losses in the world, at nearly 1,300 Australian dollars ($1,377) per resident". Taking note of this pocket of gambling, analysts are becoming increasingly positive about some of Australia's biggest gaming firms.
While Australia is just one locale where the thriving business of gambling seems to underscore a broader recovery, I continue to be bullish on increased consumer spending worldwide. One overlooked fund that offers access to global gaming is the
Market Vectors Gaming ETF
, which has outpaced PEJ so far in 2011. PEJ offers exposure to some gaming firms, but if you're a risk-tolerant investor looking to get bullish on gambling, BJK is a solid fund to consider if you're looking to make longer-term trades.
At the time of publication, Dion Money Management held no positions in any securities mentioned.
-- Written by Don Dion in Williamstown, Mass.