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Goldman Sachs upgrades Avis Budget to Neutral, citing lean cost base, lower EV exposure, and potential for sustained pricing growth.

Avis Budget Shares Get Upgrade: Analyst Applauds Lean Cost Base, Lower EV Exposure, Younger Fleet Mix

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HondaJet Elite S Serial Number 209, the next aircraft expected for delivery to Jet Token.

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How To Play The Surge In Private Aviation

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The odds of running a $1 billion business are slim to none.

Unless you’re Elon Musk. Then you run a few.

The CEO of Tesla Inc (NASDAQ: TSLA), SpaceX and the Boring Co. is now known to head two firms that are both valued north of $25 billion.

What Elon Musk, Jeff Bezos, Cornelius Vanderbilt And Other Big Execs Have In Common

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Xtant Medical Holdings Inc

Goldman Sachs&nbsp;analyst Lizzie Dove upgraded&nbsp;Avis Budget Group, Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CAR#NASDAQ">CAR</a>) shares to Neutral from Sell,&nbsp;<a href="https://www.benzinga.com/quote/CAR/analyst-ratings" target="_blank" rel="noreferrer noopener">raising the forecast to $130 from $118.</a>
According to the analyst, Avis Budget will fare better than its peers given its lean cost base, lower exposure to EVs&nbsp;<a href="https://www.benzinga.com/calendars/earnings" target="_blank" rel="noreferrer noopener">and slightly younger fleet mix.</a>
Though estimates for the year have troughed, the analyst still saw some downside to 2025 estimates, pending further proof points on the stabilization of pricing.&nbsp;
Dove also projected the gap between used and new vehicle pricing to narrow in 2025, given lower supply and new vehicle prices trending lower, which should also mean a slower rate of DPU growth (i.e., less of a headwind) for Avis Budget.
The company has $4.1 billion of vehicle debt which will mature this year, and another $6.7 billion which will mature in 2025.&nbsp;
As such, the analyst saw ~$200 million interest expense pressure in 2024, and ~$75 million in 2025 as the company refinances at higher rates.&nbsp;
Avis had a ~30% increase in pricing since 2019, and while the analyst believed this strength to decelerate, the ability to sustain a level of pricing growth above historical averages could create additional tailwinds to Avis&#8217;s earnings.
In addition, a more benign competitive environment may provide upside and further cost efficiencies.
The analyst expects the company&#8217;s FY25<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">&nbsp;revenue to be $12.025 billion.</a>
According to&nbsp;<a href="https://pro.benzinga.com/?gspk=YWRhbWVja2VydDUzMzY&amp;gsxid=zBMR4PKmcgBw" target="_blank" rel="noreferrer noopener">Benzinga Pro</a>, Avis Budget Group stock lost more than 33% in the past year. Investors can gain exposure to the stock via&nbsp;SPDR S&amp;P Transportation ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XTN#NYSE">XTN</a>) and&nbsp;Royce Quant Small-Cap Quality Value ETF&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SQLV#NASDAQ">SQLV</a>).
CAR Price Action: Avis Budget Group shares are trading higher by 1.88% to $123.39 at last check Thursday.
Read Next:<a href="https://www.benzinga.com/markets/equities/24/04/38097868/exxons-earnings-amidst-oil-price-challenges-has-bright-spots-says-analyst"> Exxon&#8217;s Earnings Amidst Oil Price Challenges Has Bright Spots, Says Analyst</a>
Photo: Rafapress via<a href="https://www.shutterstock.com/image-photo/july-4-2023-brazil-this-photo-2326966213"> Shutterstock</a>

HondaJet Elite S Serial Number 209, the next aircraft expected for delivery to Jet Token.
This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.
Thanks to an onrush of demand from both mass affluent and more traditional customers, the sleepy, cyclical, private jet industry appears to be undergoing secular growth.&nbsp;
One company that believes it is positioned to meet this demand is <a href="https://www.startengine.com/jettoken">Jet Token Inc.</a>, a private jet membership and booking platform that specializes in the HondaJet Elite S. According to Jet Token&rsquo;s <a href="https://www.startengine.com/jettoken?cmpid=618c41dfc87ae10001ac8791&amp;utm_source=benzinga&amp;utm_medium=article&amp;utm_campaign=002">StartEngine</a> page, the company has raised close to $14&nbsp;million and has signed a purchase agreement with Honda Motor Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hmc#NYSE">HMC</a>). Boasting a fleet of what the company says is one of the quietest and most cost-efficient jets, Jet Token has the enviable task of providing service to a market otherwise out of stock.&nbsp;
In February 2022, the demand for private jet travel <a href="https://wingx-advance.com/wingx-bizav-weekly-bulletin/">rose 15% above</a> the previous February, marking new industry highs and creating capacity bottlenecks for key players. Records from several sources reflect a common story: too many travelers are chasing too few private jets.
Berkshire Hathaway&rsquo;s NetJets Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/brk-b#NASDAQ">BRK-B</a>), Executive Jet Management and Jets.com have all had to suspend their Jet cards sales due to an overload of demand. NetJets, which is the largest player in the fractional jet industry, also instituted a year-long wait for their new members to fly, stating that &ldquo;Light jet inventory constraints are such that additional sales before more aircraft are delivered would put our service at risk.&rdquo;&nbsp;
As the pandemic continues to impose difficulties on transportation-based ETFs such as SPDR S&amp;P Transportation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xtn#NYSE">XTN</a>) and iShares US Transportation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/iyt#NYSE">IYT</a>) as well as key aviation players like Southwest Airlines Co. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/luv#NASDAQ">LUV</a>) and Delta Air Lines Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dal#NASDAQ">DAL</a>), the appeal of private aviation is not just about avoiding infection, but is also about avoiding flight cancellations.
<h2>The COVID Impact: Supply Versus Demand</h2>
Reflecting the industry&rsquo;s overwhelming surge in demand is Wheels Up Experience Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/up#NYSE">UP</a>)&rsquo;s press release. On November 1st, 2021, the company imposed a 90-day wait period for new members who have paid up to $100,000 in membership deposits, a development indicative of the capacity crunch that has affected a variety of key players in the private aviation space.
The pandemic has placed the <a href="https://nbaa.org/">$200 billion per year</a> private jet industry on an upward trajectory. Many with wealth (businesses included) finally got off the fence in 2020-2021 and took their first flight. Conventional wisdom in private aviation remains that if a traveler has the means to fly private and does it once, then that traveler will do it again. This has been particularly true for both busy executives flying on the company dime and for wealthy individuals who don&rsquo;t travel often but travel well when they do so.&nbsp;
But what about buying a used jet? Peder von Harten, vice president of Nicholas Air, says the pricing of used aircraft has increased by <a href="https://privatejetcardcomparisons.com/tag/publicly-traded-private-jet-companies/">30% to 40%</a>. Another key private jet player, Jetcraft Corp., has gone all the way to Asia to find used aircraft for its fleet.
With big manufacturers still reeling from the effects of the pandemic, supply is drastically lagging behind the explosive demand for private flights. A shortage of <a href="https://www.benzinga.com/analyst-ratings/analyst-color/16/10/8623502/is-there-a-pilot-shortage">pilots</a>, <a href="https://www.colibriaircraft.com/the-impact-of-historic-low-levels-of-supply-july-2021/">private jets</a>, and <a href="https://privatejetcardcomparisons.com/2021/08/11/record-demand-means-a-new-normal-new-rules-for-private-jet-flyers/">general laborers</a> provides a multicausal explanation for this deficit.&nbsp;
Solving this issue may require a host of costly and timely solutions. All the while, those companies with jets in hand, such as <a href="https://www.startengine.com/jettoken">Jet Token</a>, may already have an advantage.&nbsp;
<iframe height="314" src="//www.youtube.com/embed/eK9Yc5cnrUY" width="650"></iframe>
&nbsp;
<a href="https://www.startengine.com/jettoken"><img alt="" src="https://www.benzinga.com/files/u360337/cargo_space.png" style="height:369px; width:650px" /></a>
Demonstration of the cargo capacity of the HondaJet Elite/S
<iframe height="314" src="//www.youtube.com/embed/emGo7vgzpAI" width="650"></iframe>
&nbsp;
Disclaimer: While Jet Token may plan to begin preparing for a public listing, we have not taken any additional steps toward a public listing beyond reservation of the ticker symbol, and there can be no guarantee that such an offering will take place. Even if the company is publicly listed, there is also no guarantee that an active market for trading shares will develop or be sustained.
The ongoing Reg A+ offering is made available through StartEngine Primary, LLC, member FINRA/SIPC. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. You should read the <a href="https://www.jettoken.com/oc">Offering Circular</a> and <a href="https://www.jettoken.com/o#riskfactors">Risks</a> related to this offering before investing.
The preceding post was written and/or published as a collaboration between Benzinga&rsquo;s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. Benzinga may receive monetary compensation from the issuer, or its agency, for publicizing the offering of the issuer&rsquo;s securities. This content is for informational purposes only and is not intended to be investing advice. This is a paid ad. Please see 17b disclosure linked in the campaign page for more information.
For more information you can always reach a live US based Jet Token Inc. representative 24/7 at 1-866-694-0014 and be sure to visit <a href="https://www.jettoken.com/investors">https://www.jettoken.com/investors</a>.

The odds of running a $1 billion business are slim to none.
Unless you&rsquo;re<a href="https://www.benzinga.com/topic/elon-musk"> Elon Musk</a>. Then you run a few.
The CEO of Tesla Inc (NASDAQ: <a class="ticker" href="/stock/tsla#NASDAQ">TSLA</a>), SpaceX and the Boring Co. is now known to head two firms that are both valued north of $25 billion.
With Tesla&rsquo;s $46-billion market cap and SpaceX&rsquo;s <a href="https://www.cnbc.com/2018/05/22/spacex-leading-the-space-race-to-launch-humans-to-mars.html">estimated </a>worth of about $28 billion, Musk is working to cement his fortune and legacy as this century&rsquo;s Cornelius Vanderbilt.
<h3>A Solid Investment</h3>
Interestingly, Vanderbilt also made his money in <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/12/10873303/how-musks-tesla-and-spacex-could-combine">diverse transportation ventures</a>. The shipping and railroad tycoon, together with railroad magnate Andrew Carnegie, proved the industry to be historically lucrative.
The market continues to testify to transportation&rsquo;s profitability.
SPDR S Tr/S&amp;P TRANSN ETF (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>) trades up 150.5 percent from its 2011 debut price, and iShares Dow Jones Transport. Avg. (ETF) (BATS: <a class="ticker" href="https://www.benzinga.com/stock/iyt#BATS">IYT</a>) is up 141 percent from its 2003 offering.
<h3>A Common Interest</h3>
Musk&rsquo;s contemporaries have transportation assets of their own.
<a href="https://www.benzinga.com/topic/jeff-bezos">Jeff Bezos</a>, CEO of Amazon.com, Inc. (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>) and owner of The Washington Post, founded Blue Origin for commercial space travel and is an Uber investor.&nbsp;
Berkshire Hathaway Inc. Class A (NYSE: <a class="ticker" href="/stock/brk-a#NYSE">BRK-A</a>) (NYSE: <a class="ticker" href="/stock/brk-b#NYSE">BRK-B</a>) CEO <a href="https://www.benzinga.com/topic/warren-buffett">Warren Buffett</a> counts BNSF Railway, Berkshire Hathaway Automotive and Precision Castparts, an aerospace parts producer, in his portfolio.
<a href="https://www.benzinga.com/topic/richard-branson?page=1">Richard Branson</a>, who formerly owned Virgin Atlantic and Virgin Mobile, founded space travel company Virgin Galactic and rail company Virgin Trains. He also invested in Hyperloop One.
Microsoft Corporation (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>) cofounder Paul Allen launched Stratolaunch and funds SpaceShipOne for commercial space travel.
Related Links:
<a href="https://www.benzinga.com/news/17/07/9755902/master-of-all-trades-every-industry-jeff-bezos-has-a-hand-in">Master Of All Trades: Every Industry Jeff Bezos Has A Hand In</a>
<a href="https://www.benzinga.com/general/education/17/02/9070231/6-things-elon-musk-is-working-on-other-than-tesla">6 Things Elon Musk Is Working On Other Than Tesla</a>
Photo by Maurizio Pesce via Wikimedia.&nbsp;
Original publication: May 26, 2018

Boeing Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ba#NYSE">BA</a>) opened higher Monday following rotation from tech stocks into travel.
On Monday afternoon, airline heavy SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xtn#NYSE">XTN</a>) was trading up 1% while technology ETF PowerShares QQQ Trust (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/qqq#NASDAQ">QQQ</a>) was trading down 1.5%.
Although rotation in the market is keeping S&amp;P 500 near all-time highs, traders may find it difficult to find bullish stocks. It appears institutions may believe re-opening stocks are the next bull market and option traders bet&nbsp;$543,936 the price of Boeing is going higher.
See Also:&nbsp;<a href="https://www.benzinga.com/trading-ideas/long-ideas/21/05/21026504/these-3-airlines-look-bullish-going-into-the-week-how-to-play-them">These 3 Airlines Look Bullish Going Into The Week: How To Play them</a>
The Boeing Option Trades: Below is a look at the notable options alerts, courtesy of <a href="https://pro.benzinga.com/?gspk=cm9tYWluanVsaWVu&amp;gsxid=bNap42Fd6S0c&amp;%2F%3Fgspk=cm9tYWluanVsaWVu">Benzinga Pro</a>:
<ul>
<li>At 9:32 a.m., Monday a trader executed a call sweep, near the ask, of 413 Boeing options with a $240 strike price expiring on May 14. The trade represented a $144,137 bullish bet for which the trader paid $3.49 per option contract.</li>
<li>At 9:32 a.m., a trader executed a call sweep, near the ask, of 392 Boeing options with a $240 strike price expiring on May 14. The trade represented a $146,608 bullish bet for which the trader paid $3.74 per option contract.</li>
<li>At 10:00 a.m., a trader executed a call sweep, near the ask, of 203 Boeing options with a $240 strike price expiring on May 14. The trade represented a $71,456 bullish bet for which the trader paid $3.52 per option contract.</li>
<li>At 11:21 a.m., a trader executed a call sweep, near the ask, of 223 Boeing options with a $240 strike price expiring on May 14. The trade represented a $59,095 bullish bet for which the trader paid $2.65 per option contract.</li>
<li>At 12:03 p.m., a trader executed a call sweep, near the ask, of 292 Boeing options with a $240 strike price expiring on May 21. The trade represented a $122,640 bullish bet for which the trader paid $4.20 per option contract.</li>
</ul>
Why It&rsquo;s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates &ldquo;smart money&rdquo; has entered into a position.
BA Price Action: Shares of Boeing were trading up 0.2% to $235.97.
Photo by Steve Lynes&nbsp;<a href="https://commons.wikimedia.org/wiki/File:EGLF_-_Boeing_737_Max_-_N120IS_(43406207022).jpg">via Wikimedia</a>.

Options

Boeing Options Traders Bet Travel Is The Next Bull Market

On CNBC&#39;s &#39;Fast Money Halftime Report,&#39; the investment committee gave their final trades of the day.
BNY Mellon Investment Management&#39;s Liz Young likes SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xtn#NYSE">XTN</a>).
Short Hills Capital Partners&rsquo; Stephen Weiss likes XPO Logistics, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xpo#NYSE">XPO</a>).
Virtus Investment Partners&rsquo; Joe Terranova likes Bunge Limited (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/bg#NYSE">BG</a>).
Cerity Partners&#39; Jim Lebenthal likes Thermo Fisher Scientific Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/tmo#NYSE">TMO</a>).

Media

'Halftime Report' Final Trades: XPO Logistics, Thermo Fisher Scientific And More

On <a href="https://www.cnbc.com/video/2020/08/20/final-trades-jp-morgan-keysight-transports-more.html">CNBC&#39;s &quot;Fast Money Halftime Report,&quot;</a> Liz Young suggested SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xtn#NYSE">XTN</a>) is a buy. She likes it as a recovery play.
Degas Wright is a buyer of Equinix Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/eqix#NASDAQ">EQIX</a>).
Stephen Weiss wants to buy Keysight Technologies Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/keys#NYSE">KEYS</a>) ahead of earnings. He is expecting a great quarter.
Josh Brown likes JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>) because it is trading below $100.
Pete Najarian thinks CH Robinson Worldwide Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/chrw#NASDAQ">CHRW</a>) is going higher. He noticed some bullish options activity in the name.

CHRW

EQIX

KEYS

'Fast Money Halftime Report' Picks For August 20: Equinix, Keysight And More

On the surface, it looks like Lyft, Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/lyft#NASDAQ">LYFT</a>) and soon-to-be public rival Uber are technology companies. Both companies tout self-driving technology and the word &ldquo;technology&rdquo; appears throughout the <a href="https://www.uber.com/about/">Uber website</a>.
Companies may view themselves through a certain lens and customers may agree with that view, but index providers don&#39;t have to agree. In the cases of Lyft and Uber, Standard &amp; Poor&#39;s and MSCI, the index providers that maintain the Global Industry Classification Standard (GICS) don&#39;t view the ridesharing companies as technology firms.
Said another way, don&#39;t expect shares of Lyft and Uber when the latter goes public to reside in popular technology exchange traded funds, such as the Technology Select Sector SPDR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlk#NYSE">XLK</a>).
<h3>Why It&#39;s Important</h3>
In what may be a surprise to some investors and Lyft and Uber passengers, the two rideshare giants will be classified as industrial companies with sub-industry classification in the transportation group.
GICS &ldquo;has assigned Road and Rail as Lyft&rsquo;sprimary Industry (level 3)and Trucking as its primary sub-industry(level 4),&rdquo; <a href="https://www.capitaliq.com/media/223869-GICS%20Change%20for%20Ride%20Sharing%20companies-external.pdf">according to S&amp;P</a>. &ldquo;The decision was based on Lyft&rsquo;s Form S-1 filing, &#39;(t)he Company generates substantially all of its revenue from its ridesharing marketplace that connects drivers and passengers.&#39;&rdquo;
As industrial stocks, Lyft and Uber could make their way to ETFs such as the Industrial Select Sector SPDR (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xli#NYSE">XLI</a>). With the transportation designation, the two stocks could eventually reside in ETFs, such as the SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xtn#NYSE">XTN</a>) and the iShares Transportation Average ETF (CBOE: IYT). IYT tracks the widely followed Dow Jones Transportation Average.
<h3>What&#39;s Next</h3>
To be specific, GICS views Lyft and Uber as trucking companies. There are three qualifications to be considered a trucking company, one of which is passenger transportation, something Lyft and Uber are obviously engaged in.
To be classified as a road transportation firm, a company must meet one of four qualifications. Lyft and Uber meet two &ndash; carpool and vanpool exposure and taxi/livery services.
&ldquo;We have taken this opportunity to have reviewed approximately 200 global public and private companies operating in the similar ride sharing business model as Lyft and Uber and reassigned their primary industry and sub-industry to conform with GICS&rsquo;s Road and Rail and Trucking respectively,&rdquo; said S&amp;P. &ldquo;We have further assigned more than half of those into sub-industries like Taxicabor Carpool and Vanpool Operations. For a few that are purely providing online transportation softwareor in the car rental business, we have also assigned them as such under either the Online Transportationor Passenger Car Rental.&rdquo;
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Sector ETFs

IPOs

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LYFT

The Surprising ETFs That Will Hold Lyft And Uber

Transportation stocks and exchange traded funds did not deliver for investors in 2018. Last year, the Dow Jones Transportation Average Index slumped 12.9 percent.
Other baskets of transportation stocks performed even more poorly in 2018.
<h3>What Happened</h3>
The SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xtn#NYSE">XTN</a>), an equal-weight alternative to the cap-weighted Dow Jones Transportation Average Index, slid 17.3&nbsp;percent last year, far outpacing the declines suffered by the transportation benchmark.
The $146.38 million XTN follows the S&amp;P Transportation Select Industry Index. That benchmark looks to &ldquo;provide exposure to the transportation segment of the S&amp;P TMI, comprises the following sub-industries: Air Freight &amp; Logistics, Airlines, Airport Services, Highways &amp; Rail Tracks, Marine, Marine Ports &amp; Services, Railroads, and Trucking,&rdquo; <a href="https://us.spdrs.com/en/etf/spdr-sp-transportation-etf-XTN">according to State Street</a>.
<h3>Why It&#39;s Important</h3>
XTN provides exposure to six transportation industry groups, but the ETF is dominated by trucking firms, airlines and air freight and logistics providers. Those industries combine for over 80 percent of the ETF&#39;s weight. Some analysts see XTN&#39;s airline exposure as a potential catalyst for the fund this year.
&ldquo;CFRA has a positive fundamental outlook for the airline sub-industry,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Monday. &ldquo;While unit revenues improved in 2018 and fuel prices retreated in the last quarter of the year, CFRA Equity Analyst Jim Corridore thinks investors focused on worries about slowing economic growth and rising interest rates punished the stocks of most U.S. airlines in 2018.&rdquo;
<h3>What&#39;s Next</h3>
XTN&#39;s air freight and logistics exposure could also benefit the fund in 2019.
&ldquo;CFRA also has a positive fundamental outlook for the air freight and logistics sub-industry,&rdquo; said Rosenbluth. &ldquo;Corridore thinks fundamentals in domestic shipping are likely to strengthen over the next year and the valuations of many logistics companies are likely to expand on improved investor sentiment, should signs emerge that the U.S. and global economies are improving.&rdquo;
XTN has Overweight ratings on XTN and the iShares Transportation Average ETF (CBOE: IYT), which tracks the aforementioned Dow Jones Transportation Average Index.
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Analyst Color

This Transportation ETF Could Benefit From Air Freight, Logistics Exposure This Year

The broader industrial sector has faced challenges this year, but the recent performance of the Industrial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xli#NYSE">XLI</a>) indicates some investors are turning positive on the group. XLI, the largest industrial exchange traded fund, is up 5 percent over the past week.
Transportation stocks reside in the industrial sector, and the performance of those names could be pivotal in determining the sector&#39;s near-term prospects. Diversified transportation ETFs such as the SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>) are perking up, while airline stocks are struggling.
<h3>
	What Happened</h3>
XTN, an equal-weight fund, scuffled in the first quarter, but the fund has recently shown signs of life, gaining almost 2 percent over the past week. The ETF holds companies from the following industries: air freight and logistics, airlines, airport services, highways and rail tracks, marine, marine ports and services, railroads and trucking, <a href="https://us.spdrs.com/en/etf/spdr-sp-transportation-etf-XTN">according to the issuer</a>.
Conversely, the U.S. Global Jets ETF (NYSE: <a class="ticker" href="/stock/jets#NYSE">JETS</a>) is sagging, indicating airline stocks are struggling as oil prices rise.
&ldquo;Year-to-date through April 30, the S&amp;P Airline Industry sub-index underperformed industrials stocks and the S&amp;P 500,&rdquo;&nbsp;<a href="https://newpublic.cfraresearch.com/">CFRA Research</a> equity analyst Stewart Glickman said in a Thursday note. &ldquo;The airline index was down 11.1 percent versus a 4.8-percent decline for the S&amp;P Industrials Index and a 1-percent decline for the S&amp;P 500.&rdquo;
<h3>
	Why It&#39;s Important</h3>
Not surprisingly, higher fuel prices are pinching airlines stocks and JETS, but Glickman said he sees some reasons to like the group.
&ldquo;CFRA attributes weakness in airline stocks to higher jet fuel costs,&rdquo; the analyst said. &ldquo;However, we see many positives related to demand, pricing, cash flow and valuation that we think will drive increasing investor interest once the seasonally strong summer period starts.&rdquo;
The analyst highlighted American Airlines Group Inc. (NASDAQ: <a class="ticker" href="/stock/aal#NASDAQ">AAL</a>), Delta Airlines Inc. (NYSE: <a class="ticker" href="/stock/dal#NYSE">DAL</a>), Southwest Airlines Co. (NYSE: <a class="ticker" href="/stock/luv#NYSE">LUV</a>) and Alaska Air Group Inc. (NASDAQ: <a class="ticker" href="/stock/alk#NASDAQ">ALK</a>) as among the industry&#39;s best-positioned names. The quartet combines for over 38 percent of JETS&#39; roster.
<h3>
	What&#39;s Next</h3>
XTN allocates 23.14 percent of its weight to airline stocks, making them the ETF&#39;s third-largest industry exposure. CFRA has Overweight ratings on JETS and XTN.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/05/11681895/focus-on-the-future-of-tech-with-this-etf">Back To The Future With This ETF</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/18/05/11681892/a-surging-software-etf">Remember This Software ETF</a>

JETS

Transportation ETFs Try To Regain Lost Momentum

The promise was for a $1-trillion infrastructure plan from Trump&#39;s campaign days but the actual plan launched lately is a $200-billion federal infrastructure plan, which comprises below-mentioned areas:
<ol>
<li>
		$100 billion in matching grant would go to states and cities on new, <a href="https://www.vox.com/policy-and-politics/2018/2/12/17003840/trumps-infrastructure-plan">less-generous terms</a>.</li>
<li>
		$50 billion rural block grant program that will be available to states based on the length of rural roads and the level of rural inhabitants.</li>
<li>
		Around $20 billion for &quot;projects of national significance&quot; meaning &quot;projects that can lift the American spirit, that are the next-century-type of infrastructure as opposed to just rebuilding what we have currently.&quot;</li>
<li>
		Additional &quot;$20 billion in fund <a href="https://www.vox.com/policy-and-politics/2018/2/12/17003840/trumps-infrastructure-plan">would go to federal loan programs</a> that underwrite private financing of profitable infrastructure projects.&quot;</li>
<li>
		Plus, there&#39;s a $10-billion capital financing program that would finance the construction of federal office buildings and similar infrastructure for actual government use.</li>
</ol>
Per <a href="https://www.vox.com/policy-and-politics/2018/2/12/17003840/trumps-infrastructure-plan">an article published</a> on VOX.com, &quot;federally funded highways are financed on the basis of an 80-20 federal-state split.&quot; Trump&#39;s proposal is to reverse the 80-20 formula and call for states and cities to dole out at least $4 for every $1 in federal money they get. Some experts believe that the current formula results in &quot;over-investment in new highway projects with little transportation value.&quot;&nbsp;
The overall plan is supposed to lure private companies to come up of the groundwork and reconstruct America to the extent of $1.5 trillion <a href="http://fortune.com/2018/02/12/trump-infrastructure-plan-speech-white-house-budget/">over the coming 10 years</a>. However, <a href="http://fortune.com/2018/02/12/trump-infrastructure-plan-speech-white-house-budget/">sources believe that</a> private investors are less likely to be drawn to this project.
Investors should also note that the Trump administration did not roll out a separate infrastructure proposal, rather it came with a budget package &quot;that would also <a href="http://fortune.com/2018/02/12/trump-infrastructure-plan-speech-white-house-budget/">cut $48 billion in federal funding</a> for other programs and services.&quot;
The vox.com article indicated that Republican administrations are known for proposing big initiatives that are intended to be funded by increasing budget deficits. George W. Bush&#39;s 2001 tax cuts, 2003 tax cuts and Medicare expansion as well as Trump&#39;s 2017 tax cuts and his big increase in military spending have been held as examples for this Republican tendency by vox.com.
Any Bright Side? 
There is an initiative that would save $350 billion for drinking water pipes to guarantee that there is no another Flint, Michigan-style water crisis in the coming few years. This single initiative grossed more federal funds than the entire infrastructure plan. So, water ETFs like PowerShares Water Resources PHO and First Trust ISE Water Index Fund FIW should benefit from this plan.
As long as infrastructure ETFs are concerned, there are less likely to get a boost as financing would be a big issue. Still, investors can keep a tab on funds like Global X U.S. Infrastructure Development ETF PAVE, ProShares DJ Brookfield Global Infrastructure ETF TOLZ and SPDRS&amp;P Global Infrastructure ETF GII.
Transportation ETFs like iShares Transportation Average ETF IYT and SPDR S&amp;P Transportation ETF XTN should also be closely watched.
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SPDR FTSE/Macquarie Global Infrastructure 100 ETF

PAVE

PowerShares Exchange Traded Fund Water Resource Portfolio

TOLZ

Will Infrastructure ETFs Get A Boost From Trump's Plan?

The transportation sector is struggling this earnings season with total earnings from 97.9% of the sector&#39;s total market capitalization that has reported so far down <a href="https://www.zacks.com/ZER/zer_get_pdf.php?r=H9563238386&amp;ADID=ZP_Article_EarningsTrends">14.2%</a> despite revenue growth of 5.1%. This is much below earnings growth of 9.6% and revenue growth of 10% for the same period, in the last reporting cycle (read: <a href="https://www.zacks.com/stock/news/276893/5-sector-etfs-for-revenue-growth-play">5 Sector ETFs for Revenue Growth Play</a>).
	Earnings and revenue beat ratio of 69.2% and 61.5%, respectively, are also disappointing despite the fact that most of the industry players dominating the sector managed to beat our estimates on earnings or revenues or both.
	For a better understanding, let&#39;s dig into the earnings results of some well-known industry players:
	Transportation Earnings in Focus
	The world&#39;s largest package delivery company United Parcel Service UPS topped the Zacks Consensus Estimate on both fronts. Earnings of $1.45 surpassed our earnings estimate by a penny while revenues of $15.98 billion edged past the estimated $15.61 billion. For fiscal 2017, the company narrowed its earnings per share guidance range from $5.80-$6.10 to $5.85-$6.10. The Zacks Consensus Estimate at the time of earnings release was pegged at $6.00.
	The major railroads Union Pacific UNP, Kansas City Southern KSU and Norfolk Southern Corp NSC also beat on both the top and bottom lines. NSC outpaced the earnings estimate by a wide margin of 11 cents while earnings at UNP and KSU came ahead by a penny and three cents, respectively. Revenues for the three railroads trumped their Zacks Consensus Estimate by $102 million, $9 million and $40 million, respectively.
	Ryder Systems R, the leader in supply chain management and fleet management services, beat the earnings estimate by four cents and revenue estimate by $42 million.
	The two largest U.S. airlines Delta Air Lines DAL and United Continental UAL reported better-than-expected results but the latter lagged on revenues. Earnings of $1.57 and revenues of $11.1 billion at Delta edged past the Zacks Consensus Estimate of $1.54 and $11.03 billion, respectively. At United Continental, earnings per share of $2.22 came above the Zacks Consensus Estimate of $2.18 but revenues of $9.878 billion slightly fell shy of the estimated $9.88 billion (read: <a href="https://www.zacks.com/stock/news/281105/will-airline-etf-crash-on-subdued-q3-or-take-off-on-value">Will Airline ETF Crash on Subdued Q3 or Take Off on Value?</a>).
	Last but not the least, earnings for the leading trucking carrier J.B. Hunt JBHT came in below the Zacks Consensus Estimate by a nickel but revenues were $28 million above the estimate.
	ETFs in Focus
	Given this, the sector saw a 2.3% average decline (average price difference between a day before and after the earnings announcement of a stock) in response to earnings announcements. As such, both transport ETFs, iShares Dow Jones Transportation Average Fund IYT and SPDR S&amp;P Transportation ETF XTN, saw rough trading in the past one month. IYT shed 1.6% while XTN was down 0.4%. Both funds have an unfavorable Zacks ETF Rank #4 (Sell) rating with a High risk outlook (see: <a href="https://www.zacks.com/funds/etfs/etf-categories/Industrials-ETFs-14">all the Industrials ETFs here</a>).
	IYT
	The fund tracks the Dow Jones Transportation Average Index, giving investors exposure to a small basket of 20 securities. The fund has a certain tilt toward large-cap stocks at 55% while mid and small caps account for 26% and 19% share, respectively, in the basket. Though the product is heavily concentrated on the top firm FedEx (NYSE: <a class="ticker" href="/stock/fdx#NYSE">FDX</a>) at 14.3%, the in-focus eight firms collectively make up for 47.2% of the portfolio. From a sector perspective, air freight &amp; logistics takes the top spot with 30.8% of the portfolio while railroads, trucking and airlines round off to the next three spots with double-digit exposure each. The fund has accumulated nearly $799.2 million in AUM while sees solid trading volume of around 258,000 shares a day. It charges 44 bps in annual fees.
	XTN
	This fund tracks the S&amp;P Transportation Select Industry Index, holding 43 stocks in its basket. It is skewed toward small caps at 47% while the rest is split between mid and large caps. As a result, the in-focus firms account for over 2% share each. Further, about 32.3% of the portfolio is dominated by trucking, while airlines takes one-fourth share. Airfreight &amp; logistics, and railroads also make up for a double-digit allocation each. With AUM of $194.6 million, the fund charges 35 bps in fees per year from investors and trades in a lower volume of around 22,000 shares a day (read: <a href="https://www.zacks.com/stock/news/278169/etfs-to-buy-after-weak-jobs-report">ETFs to Buy After Weak Jobs Report</a>).
	<img alt="" src="https://staticx-tuner.zacks.com/images/zadmin_tuner_image/transport q3 etf.jpg" style="width: 620px; height: 252px;" />
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996" target="_blank">Click to get this free report</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=DAL&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">Delta Air Lines, Inc. (NYSE: </a><a class="ticker" href="/stock/dal#NYSE">DAL</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=UAL&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">United Continental Holdings, Inc. (NYSE: </a><a class="ticker" href="/stock/ual#NYSE">UAL</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=R&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">Ryder System, Inc. (NYSE: </a><a class="ticker" href="/stock/r#NYSE">R</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=KSU&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">Kansas City Southern (NYSE: </a><a class="ticker" href="/stock/ksu#NYSE">KSU</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=UNP&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">Union Pacific Corporation (NYSE: </a><a class="ticker" href="/stock/unp#NYSE">UNP</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=NSC&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">Norfolk Souther Corporation (NYSE: </a><a class="ticker" href="/stock/nsc#NYSE">NSC</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=JBHT&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">J.B. Hunt Transport Services, Inc. (NASDAQ: </a><a class="ticker" href="/stock/jbht#NASDAQ">JBHT</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=IYT&amp;split=1&amp;cid=CS-BENZ-FT-281996">ISHARS-TRAN AVG (ETF:IYT): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=XTN&amp;split=1&amp;cid=CS-BENZ-FT-281996">SPDR-SP TRANSPT (ETF:XTN): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp?ALERT=ZER_LINK&amp;d_alert=ZER_LINK&amp;t=UPS&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281996">United Parcel Service, Inc. (NYSE: </a><a class="ticker" href="/stock/ups#NYSE">UPS</a>): Free Stock Analysis Report 
	&nbsp; 
	<a href="http://www.zacks.com/stock/news/281996/q3-earnings-drags-transport-etfs-lower?cid=CS-BENZ-FT-281996">To read this article on Zacks.com click here.</a>

Earnings

JBHT

Q3 Earnings Drags Transport ETFs Lower

Hurricanes Harvey and Irma body slammed two of the biggest export-import hubs in the world, and the impact on prices and shipping costs will be felt for months in places far removed from the scenes of destruction.
The impact on ports &mdash; Houston alone is the world&rsquo;s sixth-largest &mdash; rail lines and trucking routes means that the hurricanes will likely set off price increases on a wide range of products and the materials used to manufacture them.
&ldquo;As transportation providers begin to recover from the immediate disruption and delays caused by the hurricanes, the greater domino effect of the hurricanes on supply chains will begin to appear,&rdquo; Suzie Trigg, a Dallas corporate lawyer, wrote in the journal <a href="http://www.mhlnews.com/global-supply-chain/managing-legal-aspects-implications-hurricane-supply-chain">Material Handling and Logistics</a>.
<h3>
	Get Used To The Term &lsquo;Force Majeure&rsquo;</h3>
The reach of the storms is already being felt. Pittsburgh-based Covestro already has declared <a href="https://www.bizjournals.com/pittsburgh/news/2017/08/31/covestro-declares-force-majeure-after-hurricane.html">force majeure</a>, an often contentious lifeline used by a company when it&rsquo;s unable to deliver contracted products because of a disaster or other unforeseen event.
Though its customers for polyols, caustic sodas, acids and pre-polymers used in the automotive and construction industries are nationwide, Covestro&rsquo;s two plants are in the heartland where those products are produced: the petrochemical hotbed of East Texas.
Though ports were beginning to reopen in the affected areas on Wednesday, supply chain managers expected an echo effect from the transport disruptions.
Related Link: <a href="https://www.benzinga.com/general/education/17/09/10034405/the-deadliest-hurricanes-in-us-history-amid-the-carnage-a-human-cos">The 12 Deadliest Hurricanes In U.S. History</a>
<h3>
	Supply Managers Gloomy</h3>
A member survey by the <a href="https://www.instituteforsupplymanagement.org/index.cfm?SSO=1">Institute for Supply Management</a>, conducted just after Harvey and prior to Irma, found that 94 percent expected a negative impact on the pricing of input materials and 75 percent expected a negative impact on supplier deliveries.
&ldquo;The human and corporate impact[s] are significant,&rdquo; Institute CEO Thomas W. Derry said in the report. &ldquo;Indeed, the results of our (survey) indicate ongoing challenges for U.S. companies with pricing, supplier deliveries, and certain commodities because of the storm.&rdquo;
Dozens of commodities and raw materials will be affected by the hurricanes, from food to plastics, the survey said.
The current status of roads, terminals, power outages and ports are listed in detail at the<a href="http://ppp.trustedops.com/"> National Electrical Manufacturers Association</a>, the <a href="http://alanaid.org/logistics-map/">American Logistics Aid Network</a> and the <a href="http://ppp.trustedops.com/">American Journal of Transportation</a>.
<h3>
	Then There&rsquo;s Oil</h3>
Price hikes are being felt most obviously at the pump. Hurricane Harvey shut down 34 percent, of U.S. crude oil refining capacity, then Irma cut off the state of Florida completely by shutting various ports, fuel storage terminals and pipelines throughout the state and Caribbean.
The two major waterborne delivery ports are Tampa on the Gulf Coast and Port Everglades on the Atlantic Coast. Roughly half the gas stations in much of Florida are empty and <a href="http://www.tallahassee.com/story/news/2017/09/11/hurricane-ravaged-ports-leave-florida-fuel-tight/655495001/">local reports</a> said tanker trucks &mdash; navigating rubble strew routes &mdash; were getting police escorts.
<a href="https://www.reuters.com/article/us-global-oil/oil-rises-as-iea-sees-demand-boost-u-s-fuel-stocks-slump-idUSKCN1BN03M">Reuters</a> said oil prices rose on Wednesday after the International Energy Agency said a global surplus of crude was starting to shrink. U.S. gasoline and distillate stocks fell sharply as Harvey shut nearly a quarter of the nation&rsquo;s capacity with major Gulf Coast refineries only starting to come back.
But gas prices are only part of an equation in which the world trades through an intricate, interwoven web of supply chains, the epic disruption of which often leaves effects too subtle to see until the cash register spits out a receipt months from now.
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10037101/hurricane-investment-prep-timber-etfs">Hurricane Investment Prep: Timber ETFs</a>
<iframe allowfullscreen="" allowtransparency="true" class="wistia_embed" frameborder="0" height="360" mozallowfullscreen="" msallowfullscreen="" name="wistia_embed" oallowfullscreen="" scrolling="no" src="https://fast.wistia.net/embed/iframe/ustlueul34" title="Wistia video player" webkitallowfullscreen="" width="640"></iframe>
<script src="https://fast.wistia.net/assets/external/E-v1.js" async></script>
____________
Image Credit: Hurricane Harvey, flooding in Houston, By R. Crap Mariner from Houston, USA [CC BY 2.0 (<a href="http://creativecommons.org/licenses/by/2.0" title="http://creativecommons.org/licenses/by/2.0">http://creativecommons.org/licenses/by/2.0</a>)],<a href="https://commons.wikimedia.org/wiki/File:Hurricane-Tropical_Storm_Harvey_in_Houston_-_August_27_2017_AM_(36032737983).jpg"> via Wikimedia Commons</a>

Futures

Commodities

Politics

Psychology

Topics

Events

Hurricane-Related Transit Destruction Could Lead To Price Hikes, Busted Contracts

President Donald Trump is wrecking the airspace after some of his earth-shattering announcements shook the standings of several companies and governments.
<h3> The Travel Ban </h3>
Trump issued an <a href="https://www.whitehouse.gov/the-press-office/2017/01/27/executive-order-protecting-nation-foreign-terrorist-entry-united-states">Executive Order</a> last Friday imposing a freeze on refuge admissions from Syria, a 120-day ban on refugee admission from other locations and a 90-day ban on travel from seven Muslim-majority countries, namely Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.
<h3> Chaos All Around</h3>
The ensuing development had chaos written all over it. Last Friday and Saturday, over 100 people were detained at airports. However, the detainees were released later after a federal judge temporarily stayed the order.
At points of entry, such as the airports and sea ports, confusion prevailed. People who had flown into the United States were held at major airports, and others boarding flights overseas to move into the United States were yanked off planes. The affected parties, included pre-approved refugees, students and workers holding visas and residency green cards.
On Sunday, people took to streets to protest against this order, as protestors gathered by the thousands in cities and airports across the country. Trump, meanwhile, was quick to reassure that the current executive order was not a Muslim ban, as many claimed.
<h3> Shifting The Blame </h3>
In defense of his stance, Trump <a href=https://twitter.com/realDonaldTrump/status/826041397232943104> tweeted, </a> "Only 109 people out of 325,000 were detained and held for questioning. Big problems at airports were caused by Delta Air Lines, Inc. (NYSE: <a class="ticker" href="/stock/dal#NYSE">DAL</a>)'s computer outage."
<blockquote class="twitter-tweet" data-lang="en">Only 109 people out of 325,000 were detained and held for questioning. Big problems at airports were caused by Delta computer outage,.....
&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/826041397232943104">January 30, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-lang="en">protesters and the tears of Senator Schumer. Secretary Kelly said that all is going well with very few problems. MAKE AMERICA SAFE AGAIN!
&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/826042483155013632">January 30, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>Additionally, Trump attributed the chaos to the protestors and Democrat lawmaker Chuck Schumer's emotional response. In a press conference in New York, Schumer termed the order as mean-spirited and unAmerican.
<blockquote class="twitter-tweet" data-lang="en">Nancy Pelosi and Fake Tears Chuck Schumer held a rally at the steps of The Supreme Court and mic did not work (a mess)-just like Dem party!
&mdash; Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/826390034693623809">January 31, 2017</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><h3> Delta's Outage </h3>
Delta suffered a technical glitch on Sunday, which led to cancellation of 170 domestic flights across the country and the delay and cancellation of flights at Minneapolis-St. Paul International Airport. Updating on the developments, the <a href="http://news.delta.com/update-systems-return-normal-some-flight-cancellations-linger"> company said in its website </a> that 110 flights were cancelled Monday, with a few additional cancellations possible. 
<h3>Big Outages In Recent Past </h3>
Trump's assertion may not be accurate, as the number of flight cancellation with the recent computer outage is far less than some of the past occurrences. In August 2016, Delta had to cancel 2,300 flights after a power outage in Atlanta on August 8. The company had said then it took a $100 million hit to its revenue on account of the glitch.
In July 2016, Southwest Airlines Co (NYSE: <a class="ticker" href="/stock/luv#NYSE">LUV</a>) <a href=http://www.dallasnews.com/business/southwest-airlines/2016/07/25/2300-canceled-flights-later-southwest-airlines-recovers-technical-outage> reported </a> of a system-wide outage due to a faulty router, with the outage resulting in cancellation of 2,300 flights. The outage was fixed in 12 hours, but not before throwing the entire operations over the next several days into disarray.
Trump's claim that the chaos and commotion seen at airports this week has to do with Delta's outage seems to be without merit. Delta's outage occurred only after trouble brewed at airports on account of the executive order banning refugees and people from seven predominantly Muslim nations. Additionally, Delta's most recent outage was not massive enough to warrant an attribution by Trump, although it could have more to do with the shifting blame syndrome plaguing the president.
<h3> Stock Reaction </h3>
<ul>
<li>Delta shares were down 4.06 percent at $47.68 at the time of writing. Other airline stocks also took a beating.</li>
<li>The NYSE ARCA AIRLINE INDEX (XAL) was down 1.92 percent at 108.32.</li>
<li> iShares Dow Jones Transport. Avg. (ETF) (NYSE: <a class="ticker" href="/stock/iyt#NYSE">IYT</a>) was slipping 1.33 percent to 167.77.</li>
<li> SPDR Series Trust (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>) was receding 1.19 percent to 54.97.</li>
</ul>
Image Credit: "Protests at O'Hare against Donald Trump's January 2017 Executive Order on Immigration" By Amy Guth from Chicago, IL, USA, USA - Chicago O'Hare, 1/28/17, CC BY 2.0, <a href="https://commons.wikimedia.org/w/index.php?curid=55553439">via Wikimedia Commons</a>

Global

Delta Cancellations Vs. Trump Protests: Which Caused More Of A Headache?

Following the <a href="http://www.masstransitmag.com/press_release/12272280/dart-rail-blue-line-extension-reenergizes-dallass-south-oak-cliff-community">opening of the most recent</a> Dallas Area Rapid Transit (DART) rail extension on October 24, DART has released a detailed report discussing the ways the system has positively impacted the local economy. This week marked the opening of a new three-mile DART extension connecting Ledbetter Station to the University of North Texas &ndash; Dallas&rsquo; campus.
According to the DART report, the system has been a win-win both for Dallas area travelers and the local economy.
&ldquo;Transit Oriented Development near DART Rail, like CityLine and the continued growth in the Cedars south of downtown Dallas, is driving the North Texas economic boom with more than $7 billion in economic impact from new or planned construction within a quarter mile of rail stations,&rdquo; the report read.
DART noted that rail line construction in 2014 and 2015 alone produced more than 43,000 local jobs. A study by the University of North Texas found <a href="http://www.fltod.com/research/tod_planning_and_fbc_outside_florida/muncipalities/dallas_region/tod_how_it_changed_north_texas.pdf">$5.3 billion in transit-oriented development</a> near DART Rail stations from 1996 to 2013.
The 93-mile-long rail station cost the state $5.5 billion to construct. But if DARTs numbers are correct, the system has already begun paying major dividends.
Both Hillary Clinton and Donald Trump <a href="http://www.businessinsider.com/donald-trump-and-hillary-clinton-agree-on-infrastructure-spending-2016-10">have pledged to invest heavily</a> in national <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/10/8597798/bernstein-sees-improving-volume-trends-across-the-board-">infrastructure</a> projects if elected. The economics of the DART system suggest it could be a solid model for the types of projects that could both directly and indirectly stimulate local economies.
So far this year, the PowerShares Dynamic Bldg. &amp; Const. (ETF) (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) is up 2.6 percent.
SPDR Series Trust (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>), the SPDR transportation ETF, is up 9.3 percent year-to-date.

Specialty ETFs

PowerShares ETF Trust Dynamic Building &nstruction Portfolio

Dallas Area Rapid Transit Details How DART Investment Drives Economic Value

Raymond James' airline analyst Savanthi Syth was a guest on <a href="http://video.cnbc.com/gallery/?video=3000524472">CNBC's "Squawk On The Street"</a> segment on Thursday to discuss her latest "quarterly seat check" report.
According to Syth's checks, unit revenue for the airline industry has fallen 6 percent in the recent quarter, but fuel costs have fallen "a lot more," which is helping airliner companies generate "record profits."
"I think what investors struggling with is how much of those profits that they could hold on to when fuel starts moving up," she said. "From a capacity standpoint I'm going to admit to 2 contradictory statements. I think airlines are very disciplined on capacity but at the same time supply has risen more than demand."
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/06/8080447/southwest-airlines-launches-three-day-domestic-and-international-low-fares">Southwest Airlines Launches Thee-Day Domestic And International Low Fares</a></bzrelatedlink>
She continued that her statement is contradictory because when capacity levels were set by the airlines, the expectations for GDP growth was "much higher." However, the industry hasn't seen capacity being adjusted to lower GDP growth expectations because fuel costs "has surprised" on the downside as well.
Looking forward, airliners can adjust their capacity levels to the new reality, but it can take three to six months to do so, which may create a "lag" in earnings. This would mean investors won't see any proof of companies being disciplined in the next three to six months.
Syth concluded that investors with a longer-time frame could find the risk to reward profile on the sector "really attractive."

CNBC

Economics

SAVE

Raymond James' Airline Analyst Talks Stocks, Capacity And Growth Expectations

After EgyptAir Flight 804 dove into the Mediterranean last Thursday, many sources including the <a href="http://www.nytimes.com/2016/05/20/world/middleeast/egyptair-flight-804.html">Egyptian government</a> and <a href="http://www.cnn.com/2016/05/19/politics/donald-trump-egyptair-terrorism/">Donald Trump</a> have speculated the disaster was due to terrorism.

	This positions the flight as one of four major passenger plane disasters in the past two years that had significant speculation for or proven terrorist roots. These flights include Malaysia Flight 17 over Ukraine, Malaysia Flight 370 in the Pacific Ocean and Russian MetroJet Flight 9268 over the Sinai Peninsula.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/news/16/03/7746202/how-bad-are-brussels-terror-attacks-for-eu-stability">How Bad Are Brussels Terror Attacks For EU Stability?</a></bzrelatedlink>
<h3>
	A Look Back</h3>

	The past three major disasters are shown below in red with S&amp;P 500 price movement and the SPDR Transportation ETF (SPDR Series Trust) (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>) movement in purple.

	Malaysia Flight 17 Malaysia Flight 17 was shot down by pro-Russian rebels in Ukraine on July 17, 2014.

	&nbsp;

	<img alt="malaysia_f._17_1.png" height="559" src="/files/images/2016/May/20/malaysia_f._17_1.png" width="1110" />

	The incident could have had an effect on the markets during the initial date of impact, but transportation stocks rebounded the next day.

	Malaysia Flight 370 Malaysia Flight 370 disappeared over the Pacific on March 8, 2014, and experienced significant speculation over whether the disaster was terrorist induced or not. No definitive findings were proved.

	&nbsp;

	<img alt="malaysia_f._370_2.png" height="542" src="/files/images/2016/May/20/malaysia_f._370_2.png" width="1105" />

	Disappearance of flight 370 could have caused transportation stocks to dip relative to the S&amp;P 500, but not significantly and not for long.

	MetroJet Flight 9268 MetroJet Flight 9268 was a Russian flight taken out by ISIS terrorists over the Sinai Peninsula on October 31, 2015.

	&nbsp;

	<img alt="metrojet_flight_9268_1.png" height="550" src="/files/images/2016/May/20/metrojet_flight_9268_1.png" width="1066" />

	The S&amp;P 500 was up on the day of the crash and the day after. Additionally, the disaster did not have a large effect on U.S. transportations.

	Overall, suspected (or actual) terrorist flight disasters do not have consistent or significant effects on U.S. transportation stocks or the S&amp;P 500. If the passenger planes were from an American airline, perhaps results would differ.

Do Terrorist-Suspected Air Disasters Affect U.S. Transportation Sector Stocks?

BZ NOTE: Moody's projections driven primarily by lower fuel price inputs and improvements in the US Economy

Moody's Revises US Toll Road Outlook To Positive Following Increasing Traffic Trends, Sees Traffic Growth Continuing Into 2016 At Median Rate Of 3%

Last week, logistics and shipping giant FedEx Corporation (NYSE: <a class="ticker" href="/stock/fdx#NYSE">FDX</a>), one of the biggest components in the Dow Jones Transportation Average, lowered its fiscal 2016 earnings per share guidance to $10.40&ndash;$10.90 a share from a prior range of $10.60&ndash;$11.10 per share.
 Shares of FedEx are off nearly 4 percent over the past week, a decline that has been a drag on some exchange-traded funds.
<h3>iShares Transport ETF</h3>
The iShares Dow Jones Transport. Avg. (ETF) (NYSE: <a class="ticker" href="/stock/iyt#NYSE">IYT</a>) has traded modestly higher over the past week, but the fund has tumbled in the days since FedEx&#39;s earnings update. IYT, which follows the Dow Jones Transportation Average, features FedEx as its largest holding at a weight of 9.2 percent.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5846663/goldman-is-pulling-fedex-off-its-conviction-buy-list-but">Goldman Is Pulling FedEx Off Its "Conviction Buy List," But Don't Freak Out</a></bzrelatedlink>
Regarding FedEx, &ldquo;S&amp;P Capital IQ Equity Analyst Jim Corridore thinks results were hurt by higher self-insurance and incentive compensation costs and currency impact. However, total revenue growth of 5 percent would have been even stronger if one excluded currency weakness and fuel surcharges, which were lower on lower oil prices.
&ldquo;Corridore believes that demand for international and domestic express and ground shipping remains strong,&rdquo; according to a new research note from <a href="http://trymsatoday.com/">S&amp;P Capital IQ</a>.
The research firm has buy ratings on United Parcel Service, Inc. (NYSE: <a class="ticker" href="/stock/ups#NYSE">UPS</a>) and Expeditors International of Washington (NASDAQ: <a class="ticker" href="/stock/expd#NASDAQ">EXPD</a>). Those stocks combine for 11.5 percent of IYT&#39;s weight. 
<h3>Another Transportation ETF</h3>
Investors can take a different approach to transportation stocks while mitigating single-stock risk with the equal-weight SPDR S&amp;P Transportation ETF (SPDR Series Trust (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>)). None of XTN&#39;s 50 holdings account for more than 2.5 percent of that ETF&#39;s weight and neither FedEx nor UPS are top 10 holdings in the fund.
&ldquo;Meanwhile, XTN has a 20 percent weighting in air freight &amp; logistics, which is the third largest behind trucking (36 percent) and airlines (27 percent). Unlike IYT, XTN is equally weighted, so FDX and UPS were recently a combined 4.5 percent of assets. XTN has a lower 0.35 percent expense ratio, but also has favorable S&amp;P Capital IQ STARS and Fair Value assessments,&rdquo; said S&amp;P Capital IQ.
IYT and XTN, each rated overweight by S&amp;P Capital IQ, have returned an average of almost 6.4 percent over the past month with airline stocks doing a significant part of that heavy lifting. IYT and XTN have airlines weights of 19 percent and 25.1 percent, respectively. Seven of XTN&#39;s top 10 holdings are airlines stocks.
However, an &ldquo;all in&rdquo; bet on airlines has recently paid off better than traditional transportation ETFs, as the US Global Jets ETF (NYSE: <a class="ticker" href="/stock/jets#NYSE">JETS</a>) has surged 10.5 percent over the past month. Making the recent moves higher by transportation ETFs, in particular JETS, is the fact that oil prices have rebounded somewhat with the United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) surging nearly 20 percent over the past month. Fuel is the largest input cost for airlines. 
Image Credit: <a href="https://pixabay.com/en/car-van-fedex-delivery-transport-438029/">Public Domain</a>

Intraday Update

EXPD

The FedEx Effect: How The Shipping Giant Impacts ETFs

Labor Day weekend is here and with it comes the one of the busiest travel and tourism weekends of the year. With that, it might seem like a good idea to write a story along the lines of &ldquo;best ETFs for Labor Day travel&rdquo; or for the traders left at their desks right now to gobble transportation stocks.

	Historical data reveal the opposite is true. Simply put, if seasonal trends hold in 2015, buying exchange traded funds such as the iShares Transportation Average ETF (NYSE: <a class="ticker" href="/stock/iyt#NYSE" style="font-size: 13px;">IYT</a>) or the SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="/stock/xtn#NYSE" style="font-size: 13px;">XTN</a>) just because Labor Day is here is not the best idea.

	As it pertains to the Dow Jones Transportation Average Index, the underlying benchmark for the $778.3 million IYT, history says market participants should be long transports right now.

	&ldquo;Analysis has revealed that with a buy date of March 9 and a sell date of June 4, investors have benefited from a total return of 187.93% over the last 10 years. This scenario has shown positive results in 7 of those periods. Conversely, the best return over the maximum number of positive periods reveals a buy date of October 19 and a sell date of August 12, producing a total return over the same 10-year range of 121.25% with positive results in 10 of those periods,&rdquo; <a href="http://www.equityclock.com/charts/dow-jones-transportation-average-index-seasonal-chart/" style="font-size: 13px;">according to Equity Clock</a>.&nbsp;

	Click on that link to see just nasty things get for the Dow Jones Transportation Average in September and the early stages of October. It becomes clear that if that trend stays true to form in 2015, buying IYT or XTN today or next Tuesday could be an egregious error for traders.

	In theory, the US Global Jets ETF (NYSE: <a class="ticker" href="/stock/jets#NYSE" style="font-size: 13px;">JETS</a>) should be left out of this conversation because the ETF debuted in April, confirming the historical data is not there to see how this fund performs around and following Labor Day. Alas, there is plenty of historical data for the S&amp;P Airlines Index, which has averaged <a href="http://charts.equityclock.com/airlines-industry-seasonal-chart" style="font-size: 13px;">a September loss</a> of a third of a percent over the past 20 years.&nbsp;

	Two caveats regarding JETS. First, JETS tracks an in-house index, the U.S. Global Jets Index (JETSX), not the aforementioned S&amp;P Airlines Index. Second, JETS is an ETF traders should keep on their watch lists in the coming weeks because the S&amp;P Airlines Index usually notches its third- and second-best months of the year in October and November.

	JETS deserves some credit. It has amassed nearly $43 million in assets under management in just over four months of trading while IYT and XTN have bled a combined $1.46 billion year-to-date.

	The bottom line is ETFs work well for thematic stories, such as Labor Day travel, but financial markets do not give money away. The logic behind buying transportation stocks and ETFs simply because it is Labor Day is akin to believing consumer staples and healthcare stocks will always be market leaders because people have to eat and people always get sick. Markets simply do not work like that.

Short Ideas

Good Advice: Don't Buy Transportation ETFs Just Because It's Labor Day

The U.S. Global Jets ETF (NYSE: <a class="ticker" href="/stock/jets#NYSE">JETS</a>) debuted at the end of April and for a while, the lone dedicated airline exchange traded fund flummoxed investors by trading lower in unison with oil.

	Fortunately for airline bulls, JETS and oil are diverging in favor of the airline fund. That stands to reason because jet fuel, a petroleum byproduct, is the largest input cost for airlines. Over the past month, JETS is up 5.5 percent while the United States Oil Fund (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) has plunged 17.3 percent. Tuesday was a microcosm of that trade when JETS jumped 1.1 percent in a lousy tape for U.S. stocks while USO sank 2.7 percent.

	&ldquo;According to Jim Corridore, an S&amp;P Capital IQ equity analyst, years of consolidation, bankruptcies, and capacity adjustments have given the airlines increased pricing power, which has led to rising industry revenues and passenger yields over the past five years. Fare increases, fewer fare sales and an increased mix of business travelers (who tend to pay more for tickets) contributed to industry revenue growth. Average fares have risen sharply over the past five years and passenger load factors (a measure of how full, on average, flights are) are at record levels for the industry. In 2014, the load factor was 83.4%, up from 83.1% and 82.8% in 2013 and 2014, respectively,&rdquo; said S&amp;P Capital IQ Director of ETF and Mutual Fund Research <a href="http://www.indexologyblog.com/2015/08/11/fundamental-drivers-for-airlines/">in a recent note</a>.&nbsp;

	Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/15/08/5758832/airline-survey-results-are-in-negative-eps-revisions-mig">Airline Survey Results Are In: Negative EPS Revisions Might Have Bottomed</a>
<h3>
	Wind At Its Back</h3>

	With oil prices low, JETS potentially has the wind at its back. As Rosenbluth notes, Delta Airlines Inc. (NYSE: <a class="ticker" href="/stock/dal#NYSE">DAL</a>) could see its fuel costs drop up to 50 percent this year as it &ldquo;benefits from operating its oil refinery, as well as from lower oil prices, partly offset by losses on hedging contracts entered into at higher fuel prices.&rdquo;

	Delta is the second-largest holding in JETS behind Southwest Airlines Co&nbsp;(NYSE: <a class="ticker" href="/stock/luv#NYSE">LUV</a>). Those stocks combine for 24.7 percent of the ETF&#39;s weight. JETS is top heavy as its top four holdings &ndash; Southwest, Delta, United Continental Inc. (NYSE: <a class="ticker" href="/stock/ual#NYSE">UAL</a>) and American Airlines Group Inc. (NASDAQ: <a class="ticker" href="/stock/aal#NASDAQ">AAL</a>) &ndash; combine for over 47 percent of the ETF&#39;s weight.
<h3>
	Another ETF</h3>

	Investors looking for some all airline exposure without dedicated industry commitment of JETS can consider the SPDR S&amp;P Transportation ETF (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>). XTN is an equal-weight ETF with a 26 percent weight to airline stocks, the fund&#39;s second-largest industry weight behind truckers. That is enough to give XTN some leverage to the trend of slumping oil prices.

	&ldquo;From a cost perspective, the U.S. airlines industry consumes about 19-20 billion gallons of jet fuel a year, according to Corridore, so lower oil prices can drive significantly lower costs. For many years, jet fuel has been the largest cost category for most U.S. airlines, eating up about a third of the industry&rsquo;s revenues. Oil prices were recently around $45 a barrel, down more than 50% from a year earlier,&rdquo; adds Rosenbluth.

	Seven of XTN&#39;&#39;s top 10 holdings are airline stocks.

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