Wall Street has been showing immense strength to start 2023 after the biggest annual loss since 2008 as easing inflation and hopes of the Fed’s slower rate hikes ahead has boosted risk-on trade sentiments. While the rally has been broad-based, a few sectors have been leading. Below we highlight those winning sectors and their ETFs.

Airlines

Re-opening of the Chinese economy, chances of a decline in oil prices on demand woes and slower increases in interest rates have bode well for the space.  Moreover, American Airlines Group (AAL Quick QuoteAAL - Free Report) raised its guidance for the recently completed quarter. Delta Air Lines’ (DAL) fourth-quarter 2022 earnings and revenues beat Zacks Consensus Estimates. However, delta’s guidance was weaker-than-expected.

U.S. Global Jets ETF (JETS Quick QuoteJETS - Free Report) – Up 17.9%

Consumer Discretionary

Retail ETFs have been gaining momentum to start the New Year. Despite high inflation, holiday shopping season 2022 came in at decent. Online sales during the holiday season increased 3.5% year over year to $211.7 billion, according to Adobe Analytics, as record-high discounts and promotions led shoppers to indulge on shopping.

E-commerce made up 21.6% of total retail sales over the holidays this year, according to Mastercard SpendingPulse. It’s a small increase over the holiday seasons in 2021 and 2020, when e-commerce contributed 20.9% and 20.6% of total sales, respectively, but a significant jump from the same period in 2019 when it made up 14.6% of sales.

ProShares Online Retail ETF (ONLN Quick QuoteONLN - Free Report) – Up 15.9%

Amplify Online Retail ETF (IBUY Quick QuoteIBUY - Free Report) – Up 15.1%

Invesco S&P SmallCap Consumer Discretionary ETF (PSCD) – Up 11.7%

Clean Energy

Clean energy shares have been outperforming the fossil-fuel to start 2023. Growing awareness of geopolitical concerns and commodity-rich Russia’s war with Ukraine made the importance of clean energy even brighter.  

Renewables should see more demand because they’re a cheap source of electricity. Activity is also building up in nations like China, Europe, the United States, Japan and India. China has already made a name for itself in this field. President Biden has expansionary plans for clean energy.

Invesco WilderHill Clean Energy ETF (PBW Quick QuotePBW - Free Report) – Up 15.0%

Genomics           

According to analysts, growing demand for personalized medicine, solid investments and the rising per capita income; improving infrastructure and accessibility of health-care systems and therapies; rising affordability of advanced testing facilities & organizations, and higher R&D activities will soon make genomics the next big thing in the investing space (read: A Comprehensive Guide to Genomic ETFs).

ARK Genomic Revolution ETF (ARKG Quick QuoteARKG - Free Report) – Up 14.7%