6 Sector ETFs Must Buys Now
Zacks Investment Research | Sep 18, 2017 01:53AM ET
Now that we are about to draw the curtain on the third quarter of 2017, let’s take a look which sectors are trending in the market and may create a boom going into the fourth quarter. This is especially true given the quarter has been quite eventful with two big hurricanes, lots of merger and acquisitions and geopolitical concerns. Let’s delve a little deeper.
Defense
While North Korea’s habit of launching missiles is not being viewed as a good sign by the world, it is gainful for U.S. defense ETFs. The login is simple. Any chance of a war calls for more weapons and aerospace, which will boost the sector. Moreover, the sector is undergoing inorganic expansion which should go in favor of funds like Zacks Rank #1 (Strong Buy) ETF SPDR S&P Aerospace & Defense ETF (LON:XAR) (read: 3 Top Ranked Aerospace and Defense ETFs For Your Portfolio ).
Housing
The condition of houses in areas ravaged by back-to-back deadly hurricanes is anybody’s guess. While Hurricane Harvey flooded Texas, Irma demolished Florida, though less than expected. So, the need for reconstruction and remodeling of houses will surely boost housing and construction ETFs.
This makes Zacks Rank #2 (Buy) PowerShares Dynamic Building & Construction Portfolio Home Retailer ETFs Set to Gain After Harvey ).
Auto
Hurricane Harvey dented thousands of new vehicles that were in dealership lots, according to a new analysis from the CEO of AutoNation (NYSE:AN).
The car-shopping website estimates that Harvey affected 366,000 new vehicles across Texas. Since several of these are high-profit trucks and SUVs, the trouble is deep for automakers. So, repurchase of cars will gain traction over the medium term on higher replacement demand for the damaged vehicles.
AutoNation’s CEO also emphasized that “there will be a substantial snapback either in the fourth quarter or the first quarter of next year because that's the American way.” First Trust NASDAQ Global Auto Index Fund Harvey: Pain or Gain Ahead for Auto Stocks and ETFs? )
Industrials
Manufacturing activity came in the Here's an ETF to "Make America Great Again" ).
Health Care
The health care sector is pretty steady right now with price-gouging issues retreating in the Trump administration. Along with this, mergers and acquisitions, FDA approvals of several key drugs and therapies are also leading the space. Biotech stocks were hurt the Should You Keep Your Portfolio Healthy with Biotech ETFs? )
Semiconductor
By now, everyone is familiar with the stupendous rise of bitcoin. Though several analysts expressed concerns about overvaluation, one thing is for sure that the concept of cryptocurrencies is here to stay. Like bitcoin, ether or etherum is also popular this year.
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Now, mining of cryptocurrencies needs the usage of semiconductors. A hardware known as an ASIC (Application-Specific Integrated Circuit) has been designed exclusively for mining bitcoin. This is where semiconductor companies can gain traction.
Plus, the Here's Why Semiconductor ETFs Could Continue Their Rally ).
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