5 ETFs to Watch This Holiday Season

December 3rd at 6:00am by Tom Lydon

The jolly holiday season is in full swing and companies are gearing up to handle the increased activity. Though the markets are hoping for a December rally, these exchange traded funds (ETFs) might be worth keeping an extra close eye on.

Airlines. Over the river and through the woods, millions of people will be traveling to visit family this year. The top eight carriers are expected to post a profit of $2.4 billion in the fourth quarter – the best earnings since the third quarter of 2007. Overall, passenger revenue is up 19% on higher demand and ticket prices, while revenue from cargo shipments surged 28% on higher volume and prices. And don’t forget: this all comes even as the economy remains weak and fuel prices are relatively high. [Airline ETF Grows On the Fly.]

  • Guggenheim Airline ETF (NYSEArca: FAA)

Retail. On Cyber Monday alone, American consumers spent $1 billion, the largest online shopping day ever, reports Mae Anderson for Yahoo! Finance. One thing is clear: people are shopping again. Still, the American shopper has become more frugal and “deal-sensitive” and retailers are clearly hip to this. Although consumers are flocking to the malls and outlets, experts warn that shoppers aren’t spending as much and often only a good bargain will separate them from their cash. [Retail ETFs: Looking for a ‘Black’ Christmas.]

  • SPDR S&P Retail (NYSEArca: XRT)

Gasoline. This is one that could go either way. Whether you’re driving or flying to visit your relatives this holiday season, you’ll be using gas. Although prices are forecast to dip this season, that dip is anticipated to only be a slight one. If the dollar hits a downtrend, though, a price spike may be in the offing. [‘Tis the Season: ETFs for the Holidays.]

  • United States Gasoline (NYSEArca: UGA)

Food. With the Yuletide upon us, families and friends will come together and gorge themselves over open fires. The holiday season is a good excuse to eat some delectables.

  • PowerShares Dynamic Food & Beverage (NYSEArca: PBJ)

Transportation. It’s railroad companies that have garnered the most attention after announcing impressive quarterly earnings. Look for a potential holiday season pop in the transportation sector. Additionally, shippers like FedEx and UPS are optimistic and projecting  volume increases for the holidays. [Transportation ETFs: The Good and Bad.]

  • iShares Dow Jones Transportation (NYSEArca: IYT)

For full disclosure, Tom Lydon’s clients own shares of IYT.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.