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Celebrate Thanksgiving Week With These ETFs

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Thanksgiving week is here and history shows that this holiday-shortened week is a bullish feast for stock investors –– even those with low volumes. Per the article on yahoo finance, the S&P 500 Index has gained 0.59% on average during the week over the past 50 years and that the week is positive 70% of the time.

The index generally struggles in the first couple of days of the week but the day before Thanksgiving and the day after have been impressive for the stocks. The day before Thanksgiving has been positive 78% of the time, averaging a gain of 0.3% while the day after Thanksgiving has averaged a 0.2% return over the past 50 years and has been positive 66% of the time.

Given the historical trends, this Thanksgiving week is expected to shower gains. The encouraging data from Pfizer (PFE - Free Report) and Moderna (MRNA - Free Report) on vaccine optimism coupled with a potential divided government will likely provide some support to the stocks even though the spike in new coronavirus cases is weighing on investors’ sentiments. However, Thanksgiving celebrations seem different this year with fewer gatherings and social distancing, and perhaps even remote family get-togethers (read: COVID-19 Cases on the Rise: ETFs to Bet On).

A report from LendingTree showed that Americans will spend $475 hosting Thanksgiving, including food, drink and home decor, up 53% from 2019, with smaller get-togethers. About 41% of Americans plan to host guests on Thanksgiving, up from 33% in 2019. Thanksgiving hosts are expected to shell out $343.26 on food and drink, plus $131.74 on new houseware, like dishes, furniture, linens and décor. Hosts will spend an average of $52.78 per guest.

Food, Beverage & Transportation: Hot Spots

According to the latest data from the American Farm Bureau Federation, the average cost of serving 10 people for Thanksgiving is expected to be $46.90 (or under $5.00 per person), 4% cheaper than the last year and the lowest since 2020. The shopping list includes a 16-pound turkey, stuffing, sweet potatoes, rolls and butter, green peas, fresh cranberries, a vegetable tray, a homemade pumpkin pie, whipped cream, and coffee with milk.

According to travel service provider American Automobile Association (AAA), Thanksgiving holiday travel is expected to decline 10% this year — the largest annual decline since the Great Recession in 2008. About 50 million Americans will travel 50 miles or more this Thanksgiving weekend (Nov 25-Nov 29). Though road trips are expected to fall 4.3%, it is expected to account for 95% of all holiday travel with 47.8 million people. About 2.4 million Americans are expected to fly for the upcoming 5-day holiday while travel by other modes, including buses, trains and cruises, is expected to decline 76% to 353,000 Americans (read: October US Manufacturing About 2-Year Best: 4 Solid ETF Areas).

Despite a record number of new COVID-19 cases and warnings from the Centers for Disease Control against traveling for Thanksgiving, more number of Americans is traveling ahead of the 5-day holiday. The Transportation Security Administration screened slightly more than 1 million people at US airports. While this is only 40% of the volume screened on the same day a year-ago, it is the second time since mid-March that 1 million people have been screened in a day.

Despite the weak forecasts, investors could binge on Thanksgiving celebration with the following ETFs.

Invesco Dynamic Food & Beverage ETF (PBJ - Free Report)

This product offers exposure to 30 stocks that are engaged in the manufacture, sale or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index. With AUM of $70.3 million, the fund charges 63 bps in annual fees from investors and sees a light average daily volume of 12,000 shares. Though it has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook, the fund is expected to get a boost from Thanksgiving dinner.

U.S. Global Jets ETF (JETS - Free Report)

This fund provides exposure to the global airline industry, including airline operators and manufacturers from all over the world, by tracking the U.S. Global Jets Index. In total, the product holds 40 securities and charges 60 bps in annual fees. It has gathered $2.3 billion in its asset base while sees heavy trading volume of nearly 5.1 million shares a day. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Leisure Stocks & ETFs Rally on Strong Vaccine Hopes).

iShares Dow Jones Transportation Average Fund (IYT - Free Report)

The ETF follows the Dow Jones Transportation Average Index and offers exposure to the broad transportation sector. The fund holds a small basket of 20 stocks with railroads, air freight & logistics, trucking and airlines taking the top four spots. It has accumulated $1.3 billion in its asset base while sees a good trading volume of around 269,000 shares a day. It charges 42 bps in annual fees and has a Zacks ETF Rank #3 with a High risk outlook (read: Why Cyclical Sector ETFs Are Roaring to All-Time Highs).

Direxion Connected Consumer ETF

This fund offers exposure to companies across four technology pillars — home entertainment, online education, remote health and well-being, and virtual and digital social interaction — allowing investors to capture those companies that stand to benefit from consumers connecting to products and services in new ways, especially virtual ones. It tracks the Solactive Connected Consumer Index and holds 40 stocks in its basket. The ETF charges 45 bps in annual fees and trades in an average daily volume of 2,000 shares. CCON has attracted $9.3 million in its asset base within three months of debut.

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