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Sector ETFs & Stocks to Gain On Upbeat September Jobs Data
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U.S. job gains rose by the most in six months in September and the unemployment rate declined to 4.1%, pointing to a solid economy. The closely watched employment report also showed the economy added 72,000 more jobs in July and August than previously estimated.
Stronger hiring and low layoffs combined to lift average hourly earnings, which rose 0.4% after gaining 0.5% in August. Wages increased 4.0% on a year-on-year basis after climbing 3.9% in August. The average workweek, however, fell to 34.2 hours from 34.3 in the prior month, per Reuters.
Inside the Headline Numbers
Nonfarm payrolls increased by 254,000 jobs in September, the most since March, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would rise by 140,000 positions after advancing by a previously reported 142,000 in August.
Estimates for September's job gain ranged from 70,000 to 220,000. The three-month average of monthly job growth increased to 186,000 from 140,000 in August. The share of industries reporting an uptick in payrolls jumped to 57.6% from 51.8% in August, per Reuters.
Below, we have highlighted some of the sectors and their related exchange-traded funds (ETFs) that will likely see smooth trading in the days ahead in light of the September jobs data.
Sector ETFs in Focus
Healthcare ETFs
Employment in the healthcare industry increased by 45,000 in jobs, below the average monthly gain of 57,000 over past one year. Over the month, employment rose in home health care services (+13,000), hospitals (+12,000), and nursing and residential care facilities (+9,000).
Zacks Rank #1Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the moderate momentum. The fund has 31.66% exposure to the pharma industry, followed by 21.62% exposure to the healthcare providers & services industry, 19.87% exposure to healthcare equipment & supplies, 16.19% focus on the biotech sector and 10.66% focus on the life sciences tools & services.
HCA Healthcare (HCA - Free Report) , which has a Zacks Rank #2 (Buy), deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States. The company has a trailing four-quarter earnings surprise of 8.24%, on average.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Restaurant ETFs
Employment in food services and drinking places rose by 69,000 in September, well above the average monthly gain of 14,000 over the prior 12 months.
AdvisorShares Restaurant ETF (EATZ - Free Report) is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business.
Texas Roadhouse (TXRH - Free Report) , which has a Zacks Rank #2, is a full-service, casual dining restaurant chain, which offers assorted seasoned and aged steaks hand-cut daily on the premises and cooked to order over open gas-fired grills. The company has a trailing four-quarter earnings surprise of 0.42%, on average.
Construction ETFs
Construction employment continued to trend up in September (+25,000), similar to the average monthly gain over the prior 12 months (+19,000). Over the month, nonresidential specialty trade contractors added 17,000 jobs.
Investors can keep a watch on the price movement of Invesco Dynamic Building & Construction ETF (PKB - Free Report) . The fund is mainly based on mid-and-small-cap stocks.
The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure. The company has a trailing four-quarter earnings surprise of 19.40%, on average.
Retail ETFs
Retailers added 15,600 jobs, many of them at supermarkets and drugstores.
Investors can keep a watch on the price movement of VanEck Retail ETF (RTH - Free Report) . The ETF tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
As far as the stock is concerned, Zacks Rank #2 company The Kroger Co. (KR - Free Report) , which operates in the thin-margin grocery industry, can be good pick. The company has a trailing four-quarter earnings surprise of 8.19%, on average.
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Sector ETFs & Stocks to Gain On Upbeat September Jobs Data
U.S. job gains rose by the most in six months in September and the unemployment rate declined to 4.1%, pointing to a solid economy. The closely watched employment report also showed the economy added 72,000 more jobs in July and August than previously estimated.
Stronger hiring and low layoffs combined to lift average hourly earnings, which rose 0.4% after gaining 0.5% in August. Wages increased 4.0% on a year-on-year basis after climbing 3.9% in August. The average workweek, however, fell to 34.2 hours from 34.3 in the prior month, per Reuters.
Inside the Headline Numbers
Nonfarm payrolls increased by 254,000 jobs in September, the most since March, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast payrolls would rise by 140,000 positions after advancing by a previously reported 142,000 in August.
Estimates for September's job gain ranged from 70,000 to 220,000. The three-month average of monthly job growth increased to 186,000 from 140,000 in August. The share of industries reporting an uptick in payrolls jumped to 57.6% from 51.8% in August, per Reuters.
Below, we have highlighted some of the sectors and their related exchange-traded funds (ETFs) that will likely see smooth trading in the days ahead in light of the September jobs data.
Sector ETFs in Focus
Healthcare ETFs
Employment in the healthcare industry increased by 45,000 in jobs, below the average monthly gain of 57,000 over past one year. Over the month, employment rose in home health care services (+13,000), hospitals (+12,000), and nursing and residential care facilities (+9,000).
Zacks Rank #1Health Care Select Sector SPDR ETF (XLV - Free Report) can be played to tap the moderate momentum. The fund has 31.66% exposure to the pharma industry, followed by 21.62% exposure to the healthcare providers & services industry, 19.87% exposure to healthcare equipment & supplies, 16.19% focus on the biotech sector and 10.66% focus on the life sciences tools & services.
HCA Healthcare (HCA - Free Report) , which has a Zacks Rank #2 (Buy), deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States. The company has a trailing four-quarter earnings surprise of 8.24%, on average.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Restaurant ETFs
Employment in food services and drinking places rose by 69,000 in September, well above the average monthly gain of 14,000 over the prior 12 months.
AdvisorShares Restaurant ETF (EATZ - Free Report) is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business.
Texas Roadhouse (TXRH - Free Report) , which has a Zacks Rank #2, is a full-service, casual dining restaurant chain, which offers assorted seasoned and aged steaks hand-cut daily on the premises and cooked to order over open gas-fired grills. The company has a trailing four-quarter earnings surprise of 0.42%, on average.
Construction ETFs
Construction employment continued to trend up in September (+25,000), similar to the average monthly gain over the prior 12 months (+19,000). Over the month, nonresidential specialty trade contractors added 17,000 jobs.
Investors can keep a watch on the price movement of Invesco Dynamic Building & Construction ETF (PKB - Free Report) . The fund is mainly based on mid-and-small-cap stocks.
As far as the stock is concerned, Zacks Rank #1 (Strong Buy) MasTec (MTZ - Free Report) is a leading infrastructure construction company operating mainly throughout North America. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company engages in the engineering, building, installation, maintenance and upgrade of energy, communication, utility and other infrastructure. The company has a trailing four-quarter earnings surprise of 19.40%, on average.
Retail ETFs
Retailers added 15,600 jobs, many of them at supermarkets and drugstores.
Investors can keep a watch on the price movement of VanEck Retail ETF (RTH - Free Report) . The ETF tracks the overall performance of companies involved in retail distribution, wholesalers, on-line, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers.
As far as the stock is concerned, Zacks Rank #2 company The Kroger Co. (KR - Free Report) , which operates in the thin-margin grocery industry, can be good pick. The company has a trailing four-quarter earnings surprise of 8.19%, on average.