Daily Brief - Jet, set, buy! (Nov 4, 2021)

After a grueling performance over the pandemic, this sector is getting ready to take off and return to its glory.

Travel was one of the industries hit the hardest by the pandemic due to lockdown rules and, unlike other industries which could maintain some sort of business online, travel was completely halted.

According to researcher Cirium, more than 16,000 jets were grounded worldwide and even required fuel to stop them from swaying with the wind.

Today, as vaccine rates accelerate and the concept of “normal” seems close, travel is coming back.

Booking Holdings (BKNG:NASD), a popular 3rd party vendor for anything travel related, reported quarterly revenues of $4.7 billion, a 77% increase compared to a year ago. As a result, the company’s stock was trading higher on Wednesday in after-hours after reporting better than expected results.

Here are some stats, compared to a year ago:

Room bookings: +44% ⬆️

Rental car bookings: +44%⬆️

Airline tickets: +155%⬆️ (!!!)

Booking Holdings owns Priceline, Kayak, Booking.com, OpenTable and more. Overall, you could take the performance of Booking Holdings as a representation of the rest of the market - we’re back baby!!

Along with BKNG’s rally, other stocks like Expedia Group (EXPE) and Airbnb (ABNB) have also enjoyed bullish price action.

With Thanksgiving, Christmas and New Years Eve around the corner, demand for travel will continue to increase as people look forward to spending the joyous holiday season with family and friends.

So what?

As an investor, this may be a great entry point since the industry is poised to increase with the rise in demand however, is the macroeconomic environment suitable?

Talks of tapering linger in the air as the Fed lays out plans to start withdrawing monetary support this month, stocks are at all time highs (I mean look at TSLA…) prices are rising (even my Chipotle meal is more expensive) but don’t worry, inflation is “transitory.”

With all these question marks in the air, a suitable investment may be ETFs and there’s only one ETF which covers the airline industry: the US Global Jets ETF (JETS). The fund’s top holdings are major carriers like American Airlines (AAL), Delta (DAL) and Southwest (LUV), which have a lot of ground to regain and 💰 for you to make.

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