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The Zacks Analyst Blog Highlights: SPDR S&P Aerospace & Defense, First Trust RBA American Industrial Renaissance and iShares U.S. Home Construction
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For Immediate Release
Chicago, IL – November 9, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include SPDR S&P Aerospace & Defense ETF (XAR - Free Report) , First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) and iShares U.S. Home Construction ETF (ITB - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Best Sector ETFs from Trump's 1st Year
President Trump no doubt has fueled strong optimism in the economy in his one-year of victory with his proposed pro-growth agenda aimed at accelerating economic growth, reducing regulation, increasing spending, slashing taxes, and boosting jobs and corporate profits. However, many of his policies are in a political gridlock, which is the biggest drag in his administration.
Trump’s Achievements to the Economy
The U.S. economy has been on a solid growth path with GDP growth expanding 3% annually in the third quarter following 3.1% growth in the second quarter. This represents the best back-to-back quarters of at least 3% growth since 2014. Employers have added 1.8 million jobs in a year since Trump won and unemployment dropped to the lowest level since December 2000 to 4.1% from 4.6% last November (read: 5 ETFs to Soar After Solid Q3 GDP Data).
Americans have an optimistic view of the economy with confidence hitting the highest level in almost 17 years. This is especially true as the Conference Board consumer confidence index jumped to 125.9 in October from a revised 120.6 in September. Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, recorded its biggest increase in more than eight years in September.
Coming to Trump’s policies, his tax reform proposal is closer to reality following the Senate’s passage of the $1.4 trillion budget resolution. Tax cuts have been the biggest legislative moves after the failure of the healthcare bill (read: 5 Biggest ETF Winners of Trump Trade Resurgence).
Trump’s Achievements to the Stock World
Since Trump’s win, the U.S. stock market has been on a gigantic ride with the S&P 500, the Dow Jones and the Nasdaq Composite Index rising 21.6%, 28.5% and 30.3%, respectively. The post-election stock market rally has been the fourth largest since 1936, according to Goldman Sachs.
Notably, the S&P 500 has hit 60 all-time highs since the election, unmatched any other first-year tenure of a president, according to CFRA. Per Sam Stovall of CFRA Research, the S&P 500 rally during Trump’s first year is the third best since World War II, behind only President George H. W. Bush and President John F. Kennedy.
The Dow Jones is the biggest beneficiary of the rotation in leadership in the large-cap domestic space as the index notched 1,000-point gains for four times post-election. This represents the largest number of such 1,000-point moves within a calendar year in the benchmark’s more than 120-year history, according to WSJ Market Data Group. The index topped the 20,000 mark on Jan 25, 21,000 on Mar 1, 22,000 on Aug 1 and 23,000 on Oct 17. Notably, the journey from 20,000 to 21,000 came in just 24 trading sessions, marking the fastest move of 1,000 points since 1999 (read: Dow ETFs Soar as the Index Hits 23,000).
Winners
While there were winners in every corner, a few sectors have easily outperformed on Trump’s policies since election. Aerospace, industrial products and construction are leading the way as per Zacks sectors, soaring 47.7%, 34.1%, and 33.5%, respectively, in one year. Aerospace, industrial products and construction currently have a solid Rank in the top 44%, top 38%, and top 19%, respectively.
Below, we have highlighted the best ETFs from these sectors that could be better plays as we move into the second year of Trump presidency.
Aerospace
SPDR S&P Aerospace & Defense ETF (XAR): This product offers equal-weight exposure to 35 stocks by tracking the S&P Aerospace & Defense Select Industry Index. It has been able to manage $1 billion in its asset base while trades in average daily volume of around 120,000 shares. It charges 35 bps in annual fees and has surged 40% post election. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Beyond North Korea, 4 More Reasons to Buy Defense ETFs).
Industrials
First Trust RBA American Industrial Renaissance ETF (AIRR): The ETF offers exposure to small and mid-cap securities in the industrial and community banking sectors by tracking the Richard Bernstein Advisors American Industrial Renaissance Index. Holding 58 stocks in its basket, the fund is well spread across components with none holding more than 3.5% share. The product has $203.9 million in AUM and trades in a moderate volume of around 70,000 shares per day on average. It charges 70 bps in annual fees and has a Zacks ETF Rank #3 with a High risk outlook. The ETF has risen 34.5% since Trump won election (read: Here's an ETF to "Make America Great Again").
Construction
iShares U.S. Home Construction ETF (ITB): This fund provides a pure play to home construction stocks by tracking the Dow Jones U.S. Select Home Construction Index. It holds a basket of 47 stocks with heavy concentration on the top three firms with a combined 32.5% share. The product has amassed $2.2 billion in its asset base and trades in robust volume of around 2.7 million shares a day on average. It charges 44 bps in annual fees and has a Zacks ETF Rank #2 with a High risk outlook. ITB has gained 53.2% in a year (read: Construction ETF Hits New 52-Week High).
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Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: SPDR S&P Aerospace & Defense, First Trust RBA American Industrial Renaissance and iShares U.S. Home Construction
For Immediate Release
Chicago, IL – November 9, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include SPDR S&P Aerospace & Defense ETF (XAR - Free Report) , First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) and iShares U.S. Home Construction ETF (ITB - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Best Sector ETFs from Trump's 1st Year
President Trump no doubt has fueled strong optimism in the economy in his one-year of victory with his proposed pro-growth agenda aimed at accelerating economic growth, reducing regulation, increasing spending, slashing taxes, and boosting jobs and corporate profits. However, many of his policies are in a political gridlock, which is the biggest drag in his administration.
Trump’s Achievements to the Economy
The U.S. economy has been on a solid growth path with GDP growth expanding 3% annually in the third quarter following 3.1% growth in the second quarter. This represents the best back-to-back quarters of at least 3% growth since 2014. Employers have added 1.8 million jobs in a year since Trump won and unemployment dropped to the lowest level since December 2000 to 4.1% from 4.6% last November (read: 5 ETFs to Soar After Solid Q3 GDP Data).
Americans have an optimistic view of the economy with confidence hitting the highest level in almost 17 years. This is especially true as the Conference Board consumer confidence index jumped to 125.9 in October from a revised 120.6 in September. Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, recorded its biggest increase in more than eight years in September.
Coming to Trump’s policies, his tax reform proposal is closer to reality following the Senate’s passage of the $1.4 trillion budget resolution. Tax cuts have been the biggest legislative moves after the failure of the healthcare bill (read: 5 Biggest ETF Winners of Trump Trade Resurgence).
Trump’s Achievements to the Stock World
Since Trump’s win, the U.S. stock market has been on a gigantic ride with the S&P 500, the Dow Jones and the Nasdaq Composite Index rising 21.6%, 28.5% and 30.3%, respectively. The post-election stock market rally has been the fourth largest since 1936, according to Goldman Sachs.
Notably, the S&P 500 has hit 60 all-time highs since the election, unmatched any other first-year tenure of a president, according to CFRA. Per Sam Stovall of CFRA Research, the S&P 500 rally during Trump’s first year is the third best since World War II, behind only President George H. W. Bush and President John F. Kennedy.
The Dow Jones is the biggest beneficiary of the rotation in leadership in the large-cap domestic space as the index notched 1,000-point gains for four times post-election. This represents the largest number of such 1,000-point moves within a calendar year in the benchmark’s more than 120-year history, according to WSJ Market Data Group. The index topped the 20,000 mark on Jan 25, 21,000 on Mar 1, 22,000 on Aug 1 and 23,000 on Oct 17. Notably, the journey from 20,000 to 21,000 came in just 24 trading sessions, marking the fastest move of 1,000 points since 1999 (read: Dow ETFs Soar as the Index Hits 23,000).
Winners
While there were winners in every corner, a few sectors have easily outperformed on Trump’s policies since election. Aerospace, industrial products and construction are leading the way as per Zacks sectors, soaring 47.7%, 34.1%, and 33.5%, respectively, in one year. Aerospace, industrial products and construction currently have a solid Rank in the top 44%, top 38%, and top 19%, respectively.
Below, we have highlighted the best ETFs from these sectors that could be better plays as we move into the second year of Trump presidency.
Aerospace
SPDR S&P Aerospace & Defense ETF (XAR): This product offers equal-weight exposure to 35 stocks by tracking the S&P Aerospace & Defense Select Industry Index. It has been able to manage $1 billion in its asset base while trades in average daily volume of around 120,000 shares. It charges 35 bps in annual fees and has surged 40% post election. The fund has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: Beyond North Korea, 4 More Reasons to Buy Defense ETFs).
Industrials
First Trust RBA American Industrial Renaissance ETF (AIRR): The ETF offers exposure to small and mid-cap securities in the industrial and community banking sectors by tracking the Richard Bernstein Advisors American Industrial Renaissance Index. Holding 58 stocks in its basket, the fund is well spread across components with none holding more than 3.5% share. The product has $203.9 million in AUM and trades in a moderate volume of around 70,000 shares per day on average. It charges 70 bps in annual fees and has a Zacks ETF Rank #3 with a High risk outlook. The ETF has risen 34.5% since Trump won election (read: Here's an ETF to "Make America Great Again").
Construction
iShares U.S. Home Construction ETF (ITB): This fund provides a pure play to home construction stocks by tracking the Dow Jones U.S. Select Home Construction Index. It holds a basket of 47 stocks with heavy concentration on the top three firms with a combined 32.5% share. The product has amassed $2.2 billion in its asset base and trades in robust volume of around 2.7 million shares a day on average. It charges 44 bps in annual fees and has a Zacks ETF Rank #2 with a High risk outlook. ITB has gained 53.2% in a year (read: Construction ETF Hits New 52-Week High).
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 >>
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.