The reopening trade is surging back as the summer vacation season begins and coronavirus infections plummet.
Investors piled into stocks like energy, cruise lines and casinos on Tuesday. Those stand to gain from increased travel and economic activity as social distancing ends and pre-Covid conditions return. Other sectors like small caps, emerging markets and industrial metals, which benefit from increased confidence, are also jumping.
The bullish price action comes after air travel jumped to its highest level in over a year (over 1.9 million TSA screenings on Friday and Monday). Another interesting report from OpenTable found that last week’s restaurant traffic was just 3 percent below the same week in 2019 — also the best reading since the pandemic began.
Investors will get more news this week. ADP’s private-sector payrolls report and initial jobless claims are tomorrow, followed by the government’s non-farm payrolls number on Friday. While most recent employment data has disappointed, there are reasons to expect improvement. One is the record-high number of job openings: 8.1 million at the end of March, according to Job Openings and Labor Turnover (JOLTs) report.
Another is the potential impact of different government policies. Significant anecdotal evidence indicated that some employees didn’t want to return to work given face-mask rules. There were also concerns that enhanced unemployment benefits were keeping some workers on the sidelines. Now that those issues are fading, it could be easier for jobs to come back.
Reopening Stocks Moving Now
While many stocks are moving on the reopening theme, some are obscure or thinly traded. TradeStation can help overcome this by letting investors discover symbols with certain characteristics. This time, we scanned for S&P 500 members trading at least 50,000 options contracts per day in the last month. We also included major exchange-traded funds in the list.
The table below shows some of the most active symbols that are moving based on economic optimism:
|Russell 2000 ETF (IWM)||560,000||General economic optimism, diversification away from large-cap technology|
|iShares MSCI Emerging Markets (EEM)||222,000||Global economic confidence, risk appetite, dovish Fed policy|
|Exxon Mobil (XOM)||217,000||Energy demand|
|Boeing (BA)||211,000||Travel demand|
|American Airlines (AAL)||177,000||Travel demand|
|Freeport McMoRan (FCX)||147,000||Industrial metal demand, global economic confidence|
|Carnival (CCL)||114,000||Cruise ship, travel demand|
|Norwegian Cruise Lines (NCLH)||79,000||Cruise ship, travel demand|
|United Airlines (UAL)||66,000||Travel demand|
|Occidental Petroleum (OXY)||63,000||Energy demand|
|Las Vegas Sands (LVS)||53,000||Casino, travel demand|
|Delta Airlines (DAL)||52,000||Travel demand|
|Chevron (CVX)||50,000||Energy demand|