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4 Sector ETFs & Stocks to Buy on Forecast-Beating Jobs Data

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The U.S. economy added 638,000 jobs in October 2020, easing from an upwardly revised 672,000 in the previous month. However, the reading beat market expectations of an increase of 600,000, per tradingeconomics. Still, it was the smallest employment gain since the job market started to gain ground in May from a record 20.787 million decline in April.

In October, average hourly earnings increased by 4 cents to $29.50. Average hourly earnings of private-sector production and nonsupervisory employees rose by 5 cents to $24.82. The average workweek for all employees on private nonfarm payrolls was unchanged at 34.8 hours in October.

Winning Sector ETFs

Against this backdrop, investors should bet on ETFs and stocks that are the largest beneficiaries of the October jobs data. Below we have highlighted some of these that will likely see smooth trading in the days ahead.

Leisure and Hospitality

Employment in leisure and hospitality gained 271,000. Employment in food services and drinking places increased 192,000. The industry has created 4.8 million jobs since April, but the number is still down 3.5 million since February.

Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) – The underlying Dynamic Leisure & Entertainment Intellidex Index comprises stocks of U.S. leisure and entertainment companies.

Domino’s Pizza Inc (DPZ - Free Report) – The Zacks Rank #3 (Hold) company that delivers pizzas under the Domino’s Pizza brand, is a top player in the Quick-Service Restaurant or QSR Pizza category.


In October, retail trade added 104,000 jobs. Majority of the gains (31,000) came from electronics and appliance stores. Motor vehicle and parts dealers (23,000), furniture and home furnishings stores (+14,000), clothing and clothing accessories stores (13,000), general merchandise stores (10,000), and non-store retailers (9,000) also made meaningful contribution. Employment in retail has edged up 1.9 million since April but it is still 499,000 below its February level.

SPDR SP Retail ETF (XRT - Free Report) ) – The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. Apparel Retail makes up about 17.07% of the Zacks Rank #2 fund.

Boot Barn Holdings Inc. (BOOT - Free Report)  – The Zacks Rank #1 company operates as a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories.

Health Care

Jobs in the health care sector grew 79,000 in the month, with gains in offices of dentists (11,000), hospitals (16,000), offices of physicians (14,000) and outpatient care centers (10,000) grabbing the spotlight. Employment in health care is down 950,000 since February.

Health Care Select Sector SPDR Fund (XLV - Free Report) – The underlying Health Care Select Sector Index includes companies from the following industries: pharmaceuticals; health care providers & services; health care equipment & supplies; biotechnology; life sciences tools & services; and health care technology.

HCA Healthcare Inc. (HCA - Free Report)  – The Zacks Rank #3 company is the largest non-governmental operator of acute care hospitals in the U.S. Headquartered in Nashville, TN, it operates hospitals and related health care entities.


Manufacturing employment increased 38,000, but it is still off 621,000 from February. Fabricated metal products (7,000), primary metals (6,000), wood products (4,000), food manufacturing (6,000) and plastics and rubber products (4,000) contributed to the gains.

Industrial Select Sector SPDR Fund (XLI - Free Report) – The fund looks to provide precise exposure to companies in the following industries: aerospace and defense; industrial conglomerates; marine; transportation infrastructure, machinery; road and rail; air freight and logistics; commercial services and supplies.

Weyerhaeuser Company (WY - Free Report)  – The Zacks Rank #2 company is one of the leaders in U.S. forest products with operations primarily concentrated on Southern California, Nevada, Washington, Texas, Maryland and Virginia.

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