Air Travel Is Back to Pre-Pandemic Levels
The Federal Reserve has worked hard to get a grip on inflation.
Its efforts are taking effect. Inflation has come down in recent months, but it's still higher than the central bank would like.
The good news is that's not stopping people from spending on big-ticket items like flights...
Millions of Americans traveled via airlines over the long holiday weekend. And as we enter the vacation-heavy summer months, this could be just the beginning.
Headline No. 1:
Air travel during Memorial Day weekend topped pre-pandemic levels.
McCall's Call: Memorial Day weekend, the Fourth of July, and Labor Day weekend are often the busiest travel days of the summer. Outside of the stretch between Thanksgiving and New Years, it's a good time to avoid the crazy lines at the airport...
And that's coming from someone who travels a lot!
The Transportation Security Administration ("TSA") screened nearly 10 million people last weekend, which surpassed levels from 2019. On Friday alone, the TSA had more than 2.7 million passengers clear its security checkpoints – marking a post-pandemic record.
This is great news. It's a sign that consumers are willing to spend on travel even though prices are up. According to the Consumer Price Index for airline tickets, airfare has risen about 25% over the past year. And in April, it was up big at 18.6%.
A handful of sectors will benefit from this bump in travel...
Obviously, the airlines sector is one. The easiest way to gauge this space is by looking at the U.S. Global Jets Fund (JETS) – which holds a basket of large airlines such as Delta Air Lines (DAL), Southwest Airlines (LUV), and United Airlines (UAL).
As you can see in the chart below, the Global Jets Fund has performed roughly in line with the S&P 500 Index this year. The Global Jets Fund is up a little more than 7%, while the broader index is up almost 10%.
Look for airline stocks to pick back up if these travel trends continue. We could even see JETS jump ahead of the S&P 500 into the end of the year – like it did in March.
But that's not all I'm watching in the travel space. I'm also keeping an eye on hotels and travel-booking firms...
Some of the biggest hotel stocks out there include Hyatt Hotels (H), Marriott (MAR), and Hilton Worldwide (HLT). And folks who want to book or plan a trip are likely using Booking (BKNG), Expedia (EXPE), and Tripadvisor (TRIP). These names provide a good idea of how the travel industry as a whole is performing.
The pickup in travel is also a good sign for the economy in general. It shows that despite higher prices, folks are still willing and able to spend on bigger-ticket purchases like trips.
And remember, this was only the first of the summer's busy travel weekends. That means even better figures and trends could be ahead.
Headline No. 2:
Tesla's (TSLA) Model Y was the world's top-selling car in the first quarter.
McCall's Call: The data continue to prove that the electric-vehicle ("EV") megatrend is quickly gaining mainstream adoption. U.S. and global EV sales hit record highs in terms of percentage of overall auto sales last year.
And they just hit another milestone...
According to a new report from data firm JATO Dynamics, Tesla's Model Y SUV was the bestselling car in the first three months of the year.
It wasn't just the top-selling EV. It was the bestselling car – traditional or otherwise.
This is the first time ever that an EV has claimed the top spot. But I don't expect it to be the last...
EVs accounted for 10% of global auto sales last year. That's a huge step up from less than 5% between 2018 and 2020. But it's still a small percentage compared with traditional vehicles. And EVs make up an even smaller percentage of the market here in the United States.
That leaves a whole lot of room for growth. And it's coming...
Auto companies are investing billions of dollars into EVs and their supply chains to get in position for this shift. And that means it's only a matter of time before EV sales take off and really make a dent in the traditional car's market share.
So more milestones like the Model Y's success are coming throughout the Roaring 2020s.
This is a space I'm incredibly bullish on right now and for the future. As a result, I've begun building a portfolio in my McCall Report newsletter that provides subscribers exposure to the electrification of the transportation industry – and more.
It's not too late to claim a piece of everything coming in what I call "Transportation 2.0."
Click here to learn more about The McCall Report and find out how to gain instant access to not just my EV recommendations but also my full model portfolio of 20-plus stocks.
Here's to the future,
Matt McCall
Editor, Daily Insight
May 31, 2023
Did You Miss My Latest Podcast?
The media has been in a frenzy over the ongoing negotiations about raising the debt ceiling. And it has instilled a lot of fear across the market. But on Saturday, the White House and House Speaker Kevin McCarthy reached a tentative deal. So on this episode of Making Money With Matt McCall, I discuss the ins and outs of the agreement. And even more important, I highlight which stocks stand to benefit the most from the bipartisan deal.
I also share how this news has impacted the overall market recently, as several major indexes broke out yesterday on the positive outlook out of Washington, D.C. Then, I dive into the latest in the artificial-intelligence space and uncover one niche within the sector that's being ignored right now. Tune in to hear all the details.