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ETFs & Stocks Set to Soar on October Job Data

The hurricane-battered economy rebounded strongly in October by adding 261,000 jobs, the maximum in more than a year and the best in the Trump administration. Though the addition was below the Wall Street expectation of 310,000, October marked the 85th straight month of job growth — the longest stretch of growth on record (read: Best-Performing ETF Areas of October).

Job were added across the board with gains of 89,000 in restaurants, 50,000 in professional and business services, 24,000 in manufacturing and 22,000 in healthcare. Additionally, the Labor Department revised September's job loss of 33,000 to a gain of 18,000. It also revised up August job gain from 169,000 to 208,000. Meanwhile, the unemployment rate ticked down from 4.2% to 4.1%, the lowest level since December 2000. However, wage growth disappointed with average hourly earnings off by a penny, taking year-over-year wage growth to 2.4%.

The solid job data has bolstered the case for a December rate hike and comes at a time when the Trump administration is pushing for a corporate-tax cut. Under Trump administration, the job market is expected to be the strongest given his promise to boost job growth. Notably, Trump promised to bring back manufacturing jobs from other countries and create 25 million jobs over 10 years (read: Winners & Loser of Trump's Tax Reform).

As a result, investors should bet on stocks and ETFs that are the largest beneficiaries of job gains. Below, we have highlighted some of these that will likely see smooth trading in the days ahead.

ETFs to Consider

PowerShares DB US Dollar Bullish Fund UUP


An accelerating job market and the resultant improving economy will pull in more capital into the country and lead to appreciation of the U.S. dollar. UUP is the prime beneficiary of the rising dollar as it offers exposure against a basket of six world currencies. The fund allocates nearly 57.6% in euro and 25.5% collectively in Japanese yen and British pound. The fund has so far managed an asset base of $654.8 million while sees an average daily volume of around 1.1 million shares. It charges 80 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

iShares Russell 2000 Growth ETF IWO

Small-cap stocks are the biggest beneficiaries as these are closely tied to the improving health of American economy. Honing in on the growth ones within this market cap would be the winning bet as small-cap growth stocks outperform during a trending market (a market characterized by a prolonged uptrend). As such, IWO’s exposure to a broad basket of 1,162 companies whose earnings are expected to grow at an above-average rate relative to the market makes it an excellent choice. It is one of the popular and liquid ETFs in the small-cap space with AUM of $8.8 billion and average trading volume of 498,000 shares a day. The fund charges 24 bps in annual fees from investors and has a Zacks ETF Rank #2 (read: ETFs to Benefit from Trump Tax Plan).

iShares Currency Hedged MSCI EAFE ETF HEFA

The strength in the greenback would compel investors to recycle their portfolio into the currency hedged ETFs. For those seeking exposure to the developed market, HEFA could be an intriguing pick. HEFA targets the developed international stock market with no currency risk and tracks the MSCI EAFE 100% Hedged to USD Index. It has AUM of $4.5 billion and trades in solid volume of 1.2 million shares. The fund charges 36 bps in fees per year from investors and has a Zacks ETF Rank #3 (read: Dollar Rebounds: 5 ETFs to Cash in On).

Stocks to Consider

Though several sectors will benefit from healthy hiring, the direct beneficiary is the staffing industry. This industry is well positioned at least for the near term given its superb Zacks Industry Rank (in the top 35%) at the time of writing. Investors seeking to ride out the optimism could look at a few stocks having a Zacks Rank #1 (Strong Buy), 2 or 3 and a Growth Style Score of A using the Zacks Stock Screener.

On Assignment Inc. ASGN

Based in California, On Assignment is a leading nationwide provider of temporary scientific professionals to laboratories in the biotechnology, pharmaceutical, food and beverage, chemical, and environmental industries. The stock is expected to post earnings at a growth rate of 14.15% year over year for this year. It has a Zacks Rank #3 and a Growth Style Score of A.

Kelly Services Inc. KELYA

Based in Michigan, Kelly Services provides temporary office clerical, marketing, professional, technical, light industrial, home care services, management services and other business services to a diversified group of customers. The company is expected to deliver earnings growth of 10.9% for 2017, and has a Zacks Rank #3 and a Growth Style Score of A (read: 7 ETF Picks for November).

DLH Holdings Corp. DLHC

Based in Georgia, DLH provides healthcare and social services in the United States. It has a solid earnings growth projection of 30.77% for fiscal year ending September 2018. The stock has a Zacks Rank #3 and a Growth Style Score of A.

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PWRSH-DB US$ BU (UUP): ETF Research Reports
 
ISHARS-RS 2K GR (IWO): ETF Research Reports
 
ISHA-CH MS EAFE (HEFA): ETF Research Reports
 
Kelly Services, Inc. (KELYA): Free Stock Analysis Report
 
On Assignment, Inc. (ASGN): Free Stock Analysis Report
 
DLH Holdings Corp. (DLHC): Free Stock Analysis Report
 
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