“From a fundamentals perspective, Michael Bapis, partner and managing director at the Bapis Group at HighTower Advisors, says the rise in e-commerce is the most important catalyst for transports names,” according to CNBC.
Airline Industry Looks Show Signs of Rebound Potential
Airlines are also a significant part of IYT’s lineup. There are encouraging fundamental factors for airlines, including low oil prices. Fuel is the largest input cost for airlines. The improving U.S. economy could encourage more business and leisure travel and airlines are generating impressive amounts of cash.
The U.S. Global Jets ETF (NYSEArca: JETS), which has also recently been struggling, is also showing signs of rebound potential. JETS follows the U.S. Global Jets Index, which uses fundamental screens to select airline companies, with an emphasis on domestic carriers, along with global aircraft manufacturers and airport companies.
“”Transports are an attractive rotation idea, and they could be that next area to lead equities higher,” Ari Wald, head of technical analysis at Oppenheimer, said in an interview with CNBC. “Transports have been more or less an underperformer since 2015 and, in recent years, have been kind of [flat]on a relative basis.”
For more information on Transportation ETFs, visit our Transportation category.