We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Winter Storm Stella to Lift or Hit These Sector ETFs
Read MoreHide Full Article
The Northeast U.S. is forecast to encounter winter storm Stella, leaving behind a warmer February. Freezing temperatures are not only expected to wrap the region in heavy snow, but is also likely to leave a deep impact on the U.S. economy. The storm is forecast to cover the region under almost two feet of snow with heavy winds. Needless to say, economic activity may be paralyzed over the coming few days.
However, pros and cons are probably related to every event. Among all the sectors, there are a few that are likely to be badly hit from this whiteout and some stand to gain. Below we highlight some sectors which are in focus after the winter storm Stella.
Losers
Airlines
This sector will be the worst victim of the blizzard. Such an awful snow event has already cancelled over 5,000 flights. Most airlines are now offering free rebooking for the affected fliers. Several flights are being delayed due to this cold snap.
A rapid resumption may not be possible if the load of snow on the runways is heavy and the weather remains unclear for long. As a result, we believe that airlines will have to bear with some losses as travel demand may weaken.
Since roads, railways and runways are likely to be under almost record amounts of snow and people are locked inside, transportation stocks and the related ETFs are expected to be hurt. This will likely leave an adverse impact on transportation ETFs like SPDR S&P Transportation ETF (XTN - Free Report) and iShares Transportation Average (IYT - Free Report) . XTN and IYT lost over 0.6% and 0.4% respectively on March 13, 2017.
Insurance
There is a high risk of damage to household belongings of millions of people. This increases the possibility of higher insurance claims, which can go against a bunch of insurance companies. This may in turn hit PowerShares KBW Property & Casualty Insurance Portfolio ETF (KBWP - Free Report) .
Hospitality
Tourism and hospitality sectors are also likely to be hit during this snow storm. So, consumer discretionary ETF PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ - Free Report) ) having considerable weights in restaurants, resorts and airlines are likely to feel the brunt of the snow storm as the underlying companies will do less business as long as the freezing phase continues. PEJ lost about 0.3% on March 13.
USCF Restaurant Leaders , otherwise a strong bet on the improving restaurant sector, might also see some weakness thanks to a temporary slack in sales (read: Retail Sales Rebound in January: ETF & Stock Picks).
Gainer
Energy
Why the energy sector is a clear winner of this weather disruption is anybody’s guess. As almost 50% Americans use natural gas for heating purposes, expectations of higher usage of natural gas pushed up the commodity’s prices recently.
U.S. natural gas futures price climbed to a one-month high with the blizzard approaching East. Though the stockpile of natural gas remains higher than the normal level for this time of the year, the snow event may now use up the piled-up inventory.
Image: Bigstock
Winter Storm Stella to Lift or Hit These Sector ETFs
The Northeast U.S. is forecast to encounter winter storm Stella, leaving behind a warmer February. Freezing temperatures are not only expected to wrap the region in heavy snow, but is also likely to leave a deep impact on the U.S. economy. The storm is forecast to cover the region under almost two feet of snow with heavy winds. Needless to say, economic activity may be paralyzed over the coming few days.
However, pros and cons are probably related to every event. Among all the sectors, there are a few that are likely to be badly hit from this whiteout and some stand to gain. Below we highlight some sectors which are in focus after the winter storm Stella.
Losers
Airlines
This sector will be the worst victim of the blizzard. Such an awful snow event has already cancelled over 5,000 flights. Most airlines are now offering free rebooking for the affected fliers. Several flights are being delayed due to this cold snap.
A rapid resumption may not be possible if the load of snow on the runways is heavy and the weather remains unclear for long. As a result, we believe that airlines will have to bear with some losses as travel demand may weaken.
So, investors need to be watchful on the airline ETF US Global Jets ETF (JETS - Free Report) . The fund lost over 1.3% on March 13 as several airlines were in the red on the day (read: Follow Warren Buffett With These ETF Strategies).
Transportation
Since roads, railways and runways are likely to be under almost record amounts of snow and people are locked inside, transportation stocks and the related ETFs are expected to be hurt. This will likely leave an adverse impact on transportation ETFs like SPDR S&P Transportation ETF (XTN - Free Report) and iShares Transportation Average (IYT - Free Report) . XTN and IYT lost over 0.6% and 0.4% respectively on March 13, 2017.
Insurance
There is a high risk of damage to household belongings of millions of people. This increases the possibility of higher insurance claims, which can go against a bunch of insurance companies. This may in turn hit PowerShares KBW Property & Casualty Insurance Portfolio ETF (KBWP - Free Report) .
Hospitality
Tourism and hospitality sectors are also likely to be hit during this snow storm. So, consumer discretionary ETF PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ - Free Report) ) having considerable weights in restaurants, resorts and airlines are likely to feel the brunt of the snow storm as the underlying companies will do less business as long as the freezing phase continues. PEJ lost about 0.3% on March 13.
USCF Restaurant Leaders , otherwise a strong bet on the improving restaurant sector, might also see some weakness thanks to a temporary slack in sales (read: Retail Sales Rebound in January: ETF & Stock Picks).
Gainer
Energy
Why the energy sector is a clear winner of this weather disruption is anybody’s guess. As almost 50% Americans use natural gas for heating purposes, expectations of higher usage of natural gas pushed up the commodity’s prices recently.
U.S. natural gas futures price climbed to a one-month high with the blizzard approaching East. Though the stockpile of natural gas remains higher than the normal level for this time of the year, the snow event may now use up the piled-up inventory.
As a result, natural gas equity ETF First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) added over 0.8% on March 13 (read: Natural Gas ETFs Warm Up: Will the Rally Continue?).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>