ETFs
Inflation Cools in April: 5 Sector ETFs and Stocks That Will Thrive – May 16, 2024
In April, inflationary pressures showed signs of easing, with the Consumer Price Index (CPI) on a “core” basis increasing 3.6% year-on-year, in line with expectations. This is a slowdown from the 3.8% increase seen in March. Monthly core price increases are also in line with expectations, at 0.3%, compared to 0.4% in the previous three months.
Despite this cooling, below we highlight a few sector ETFs and stocks that could gain in the near term as price gains have remained stable in these business areas.
Sector ETFs to win
Transportation – SPDR S&P Transportation ETF (XTN – Free report)
The transportation index jumped 0.9% sequentially in April and rose 11.2% year-on-year.
The XTN fund tracks the S&P Transportation Select Industry Index, which represents the transportation segment of the S&P Total Market Index. The fund has a Zacks Rank #2 (Buy).
When it comes to big stocks, Zacks Rank #3 (Hold) FedEx (FDX – Free report) can be played. It is the leader in global express delivery services. The Company offers a broad portfolio of transportation, e-commerce and business services through collectively competing, independently operating and collaboratively managed companies under the FedEx brand.
Real Estate – Select Real Estate Sector SPDR ETF (XLRE – Free report)
Weighted housing represents 32.77% of the CPI, including 7.8% rent and 23.68% private housing, according to MacroMicro data. The housing index jumped 0.4% in April. The index increased by 5.5% per year.
The underlying Real Estate Select Sector Index includes securities of companies in the following sectors, real estate management and development and REITs, excluding mortgage REITs. The fund earns 3.49% per year and charges 9 basis points in fees.
In the meantime, Host hotels and resorts (HST – Free report), has a Zacks Rank #3. It is a leading real estate investment trust (REIT) in the lodging industry, engaged in the ownership, acquisition and redevelopment of luxury and upscale hotels in the United States. -United and abroad.
Restaurants – AdvisorShares Restaurant ETF (EATZ – Free report)
The out-of-reach food index jumped 0.3% in April. The price index increased by 4.1% per year.
The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenues from the industry of catering.
CAVA Group inc. (HOW ARE YOU – Free report), which has a Zacks Rank #2, is a category-defining Mediterranean fast casual restaurant brand.
Healthcare – Select Sector SPDR ETF for Healthcare (XLIV – Free report)
The medical care index rose 0.4% in April. The index increased by 2.7% per year. The index increased by 0.6% sequentially in March, indicating strong upward price momentum.
The underlying Health Care Select Sector Index includes companies in the following sectors: Pharmaceuticals; healthcare providers and services; health care equipment and supplies; biotechnology; tools and services for life sciences; and healthcare technology.
HCA Health (HCA – Free report), which has a Zacks Rank #2 deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States.
Retail Clothing – SPDR S&P Retail ETF (XRT – Free report)
The clothing price index increased by 1.2% in April. The index gained 1.3% per year. The index rose 0.7% in March and 0.6% in February, once again indicating a strong upward trend in prices.
The fund provides exposure to US retail stocks. Apparel retail makes up about 21% of the fund. The fund charges 35 basis points in fees.
The hole (GPS – Free report) is a leading international specialty retailer offering a diverse range of clothing, accessories and personal care products. The fund has a Zacks Rank #1 (Strong Buy).
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