Travel And Financial ETFs Gain As S&P 500 Hits Positive Territory

After stocks finished the day near their highs, building on gains made last week, U.S. stock index futures are attempting to hold steady during the overnight session Monday evening as investors are seeking to extend the S&P 500′s gains after it reached positive territory for the year once again during the regular trading session.

The S&P 500 jumped 1.2%, or 38.46 points, to 3,232.39 in Monday’s regular session trade, notching gains once again this year in a rapid-fire bounce off the lows, as investors championed the return of businesses reopening after months of shuttering due to the coronavirus pandemic. The SPDR S&P 500 ETF Trust (SPY) gained 1.2% as well.

The benchmark index is now over 47% off its March low, and within a couple of hundred points of its all-time high, after dropping more than 30% from its all-time highs, and is now marginally positive, up 0.05% for 2020.

The other indexes have posted strong performances as well since reaching March lows. The Nasdaq Composite added 1.1% on Monday and reached its own new all-time high, bringing its year-to-date gains to 10.6%, while the Dow Jones Industrial Average gained 1.7%, and is now down just 3.3% for the year.

In addition to a sanguine outlook over the economy reopening, traders attribute the market’s hot streak over the last couple of months to massive governmental stimulus.

“Recent data points like the jobs report and not-as-bad-as-feared company updates have fueled the view that the worst of the declines could be behind us,” a team of RBC Captial Markets analysts told clients Monday. “The risk-on trade really is gaining traction. Valuations have spiked to historical highs in many industrial sub-sectors, signaling a strong recovery is potentially taking hold.”

Much of the recent drive higher in the indexes has been catalyzed by airline and travel stocks, with airline ETFs like the U.S. Global Jets ETF (JETS) gaining another 9% Monday, after rallying sharply since mid-May, and financial sector stocks, who have focused on digital banking development, which has boosted ETFs like the Direxion Daily Financial Bull 3X Shares (FAS), which gained over 4.6% Monday.

“Retail customers have been jolted out of the bank branches and forced to use digital banking … that’s going exactly where banks’ strategic plans have been going. So in the last two months, you’ve accelerated the digital acceleration of the banks by two to five years,” he said.

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