It’s sad, but summer time is coming to end. Consumers trends often change with the seasons and we should see some changes that may translate into movement in either direction for some exchange traded funds (ETFs). Here are some areas to watch this fall.
Airlines. Airline fares for domestic flights are 16% to 20% higher than a year ago, reports Kyle Peterson for Reuters. Economic uncertainty is making carriers more cautious. Nevertheless, planes are getting fuller and airliners are starting to add more capacity. Despite the lower traffic, airlines were able to improve their bottom line with higher fares. The cost to fly one mile rose 17% last month compared to the same period last year. As millions of Americans take to the skies to visit their loved ones, the airline ETF could take flight. [Airline ETF: Takeoff or Landing?]
- Claymore/NYSE Arca Airline (NYSEArca: FAA): up 4.5% in the last three months
Gasoline. AAA stated that the national average per gallon of regular unleaded currently stands at $2.747 a gallon, stepping back from previous high levels. But the oil and gas situation is at a fork in the road: if the economy improves, prices may rise. But if we continue to languish into the fourth quarter, prices and demand may continue to spill. [Why Oil ETFs Are Rising.]
- United States Gasoline (NYSEArca: UGA): down 0.6% in the last three months
Natural Gas. The Commodity Futures Trading Commission (CFTC) reported that large institutional investors are taking more money out of long positions than short positions. Utilities have effectively shifted their energy concerns over to the cheap natural gas, which has dramatically decreased coal demand. As the weather starts to cool, homeowners will want to keep their houses nice and toasty, cranking up the heat. However, the ample supply that may cover winter demand could keep prices moderate for the winter, which is good news for consumers, writes Steve Everly for KansasCity.
- United States Natural Gas (NYSEArca: UNG): down 30% in the last three months
Retail. Consumers aren’t out buying things they don’t need right now; they’re scaling back to the essentials that help them get through daily life. Though consumer spending may stay weak, people are buying the staples; also factor in back to school shopping – students may not need new clothes, but they definitely need new school supplies. [ETF Strategies for July’s Retail Report.]
- Consumer Staples Select Sector SPDR (NYSEArca: XLP): up 4.8% in the last three months
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.