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Likely Sector ETF & Stock Winners From May Jobs Report
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Key Takeaways
PEJ may gain as leisure & hospitality added 70K jobs, far above the yearly average.
XLV stays attractive as healthcare added 35K jobs, led by ambulatory care services.
XLE and XOM are in focus as mining and energy employment continued to expand.
Nonfarm payrolls jumped a seasonally adjusted 172,000 in May, down slightly from the upwardly revised 179,000 in April and way higher than the Dow Jones consensus estimate for 80,000, as quoted on CNBC.
The unemployment rate held steady at 4.3%, as expected. Average hourly earnings rose 0.3% for the month and were up 3.4% over the past year, both in line with the Wall Street consensus, as reported by CNBC.
Winning Sector ETFs in Focus
Leisure and Hospitality
Employment in this sector added 70,000 jobs in May, way higher than the average monthly gain of 14,000 over the past one year. Over the month, food services and drinking places added 48,000 jobs.
Invesco Leisure and Entertainment ETF (PEJ) can thus be considered for a play. Marriott International (MAR - Free Report) , a Zacks Rank #3 stock, is a leading hospitality company focused on hotel management, franchising and licensing.
Health Care
Health care employment has been an area of strength. Health care added 35,000 jobs in May, in line with the average monthly gain of 38,000 over the past one year. Over the month, ambulatory health care services added 26,000 jobs, including a gain of 11,000 in home health care services. Employment continued to trend up in hospitals (+6,000).
Zacks Rank #1 (Strong Buy) Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the moderate momentum. The fund has 37% exposure to the pharma industry, followed by 18.8% exposure to the health care equipment & supplies, about 18.4% focus on biotechnology, 16.65% exposure to the healthcare providers & services industry, and 8.8% focus on the life sciences tools & services.
HCA Healthcare (HCA - Free Report) , which has a Zacks Rank #3 (Hold), deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States. The company has a trailing four-quarter earnings surprise of 10.56%, on average.
Mining & Oil and Gas Extraction
Employment in mining, quarrying, and oil and gas extraction increased by 5,000 in May and is up by 10,000 since February. The data put focus Zacks Rank #1 State Street Energy Select Sector SPDR ETF (XLE - Free Report) and Zacks Rank #3 Exxon Mobil (XOM - Free Report) . Exxon is one of the world's largest publicly traded international oil, natural gas, and petrochemical companies.
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Likely Sector ETF & Stock Winners From May Jobs Report
Key Takeaways
Nonfarm payrolls jumped a seasonally adjusted 172,000 in May, down slightly from the upwardly revised 179,000 in April and way higher than the Dow Jones consensus estimate for 80,000, as quoted on CNBC.
The unemployment rate held steady at 4.3%, as expected. Average hourly earnings rose 0.3% for the month and were up 3.4% over the past year, both in line with the Wall Street consensus, as reported by CNBC.
Winning Sector ETFs in Focus
Leisure and Hospitality
Employment in this sector added 70,000 jobs in May, way higher than the average monthly gain of 14,000 over the past one year. Over the month, food services and drinking places added 48,000 jobs.
Invesco Leisure and Entertainment ETF (PEJ) can thus be considered for a play. Marriott International (MAR - Free Report) , a Zacks Rank #3 stock, is a leading hospitality company focused on hotel management, franchising and licensing.
Health Care
Health care employment has been an area of strength. Health care added 35,000 jobs in May, in line with the average monthly gain of 38,000 over the past one year. Over the month, ambulatory health care services added 26,000 jobs, including a gain of 11,000 in home health care services. Employment continued to trend up in hospitals (+6,000).
Zacks Rank #1 (Strong Buy) Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the moderate momentum. The fund has 37% exposure to the pharma industry, followed by 18.8% exposure to the health care equipment & supplies, about 18.4% focus on biotechnology, 16.65% exposure to the healthcare providers & services industry, and 8.8% focus on the life sciences tools & services.
HCA Healthcare (HCA - Free Report) , which has a Zacks Rank #3 (Hold), deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States. The company has a trailing four-quarter earnings surprise of 10.56%, on average.
Mining & Oil and Gas Extraction
Employment in mining, quarrying, and oil and gas extraction increased by 5,000 in May and is up by 10,000 since February. The data put focus Zacks Rank #1 State Street Energy Select Sector SPDR ETF (XLE - Free Report) and Zacks Rank #3 Exxon Mobil (XOM - Free Report) . Exxon is one of the world's largest publicly traded international oil, natural gas, and petrochemical companies.