With Thanksgiving just a day away, the holiday season is set to begin. Americans will gather with family and friends to give thanks for the blessings in their lives. However, this year could pose some challenges due to the uncertainty regarding the upcoming Trump presidency and the potential inflation rebound.

The question remains: will an improving job market and a strong stock market be enough to create a plentiful spread on the Thanksgiving table?

Least Expensive Thanksgiving Meal in 39 Years 

Last year, the average cost for a dinner of 10 was $61 according to the American Farm Bureau Federation (AFBF), as quoted on CME Group, down about 5% from a record $64.05 in 2022. Fortunately, as food inflation has cooled, the AFBF estimates that the cost this year will be $58.08 for 10 people, down another 5% from last year.

Over the past one year, food at-home prices rose only 1.1% this year. However, this price is still 19% higher than the pre-pandemic level. Meanwhile, average wages are up 4% from 2023 to 2024. When adjusted for inflation, it marked the least expensive Thanksgiving meal in the 39-year history of the AFBF Thanksgiving survey (except for 2020).

Thanksgiving Travel to Gain Speed

According to travel service provider American Automobile Association (“AAA”), Thanksgiving holiday travel is expected to gather steam. A record 80 million Americans will travel this Thanksgiving, marking a jump of 1.7 million from last year. The Transportation Security Administration (TSA) is getting ready to face the busiest Thanksgiving travel period on record, expecting to screen 18.3 million people from Tuesday, Nov. 26 to Monday, Dec. 2.

About 71.7 million people are expected to travel by car, while air travel is expected to set a new record, with a projected 5.84 million people flying domestically during the holiday week. Air travel is up 2% from last year and nearly 11% higher than 2019. International flight bookings are also up 23% from the last Thanksgiving.

Record Shoppers Expected During Thanksgiving Weekend

A record 183.4 million people are planning to shop in stores and online from Thanksgiving Day through Cyber Monday this year, according to NRF. The figure is up from the previous record of 182 million in 2023 and 18.1 million people more than five years ago in 2019. Black Friday is expected to see the highest number of shoppers (131.7 million), followed by Cyber Monday (72.3 million). Note that 65% of shoppers are expected to shop in stores.

The latest retail earnings have been varying in nature. Hence, one needs to be choosy while picking retail stocks and ETFs. Investors should note that Walmart WMT management gave cues of strong sales generation over the past few months and is off to a good start to the holiday season. Walmart and Costco COST both have a solid in-store presence. Both retailers can compete on value and will likely grab considerable market share this holiday season.

Bet on Millennials’ Shopping Pattern?  

Consumer spending is expected to reach $125 billion this Thanksgiving weekend, down from $129.5 million in the prior-year period, per the latest International Council of Shopping Centers' survey. Millennials and Gen X shoppers are expected to lead spending, with averages of $628 and $629, respectively. Baby boomers are expected to spend an average of $444.

What About Wall Street?

“The last five trading days of November are traditionally positive, since 1950,” said Sam Stovall, chief investment strategist at CFRA. “There’s a two-thirds likelihood the market is up on the day before Thanksgiving and a 57% likelihood the day after Thanksgiving, and a 71% likelihood that it’s up on Monday,” as quoted on CNBC.

ETFs in Focus

Based on the above discussion, we highlight the exchange-traded funds (ETFs) that could gain in the coming days.

Invesco Dynamic Leisure And Entertainment ETF PEJ

The underlying Dynamic Leisure & Entertainment Intellidex Index comprises stocks of U.S. leisure and entertainment companies. The PEJ ETF charges 55 bps in fees (read: Travel & Entertainment ETFs at a 52-Week High: Here's Why).

ETFMG Travel Tech ETF AWAY

The underlying Prime Travel Technology Index NTR tracks the performance of globally exchange-listed equity securities or corresponding ADRs or GDRs engaged in Travel Technology Business, which provides technology via the Internet & Internet-connected devices such as mobile phones, to facilitate travel bookings & reservations, ride sharing & hailing, travel price comparison & travel advice. AWAY charges 75 bps in fees.

Defiance Hotel, Airline, and Cruise ETF CRUZ

The underlying BlueStar Global Hotels, Airlines, and Cruises Index is a rules-based index that consists of globally-listed stocks of companies that derive at least 50% of their revenues from the passenger airline, hotel and resort, or cruise industries. The CRUZ ETF charges 45 bps in fees.

AdvisorShares Restaurant ETF EATZ

Per ICSC, about 76% respondent consumers said they would spend on dining out and other holiday items. The AdvisorShares Restaurant ETF is an actively managed exchange-traded fund that seeks to achieve its investment objective by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenue from the restaurant business. It charges 101 bps in fees.

VanEck Retail ETF RTH

Walmart and Costco have a respective 8.45% and 8.41% exposure to the RTH ETF. The fund’s top holding Amazon — another winning online retailer — has a 20.32% focus on the fund. These great holdings make RTH ETF well-positioned for the holiday season.

Global X Funds Global X Millennials MILN

The MILN ETF measures the performance of U.S.-listed companies that provide exposure to the Millennial generation companies that cohort in the United States with birth years ranging from 1980 to 2000. With millennials expected to be spending lavishly this Thanksgiving weekend, one should keep track of this ETF.

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Walmart Inc. (WMT) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

Amplify Travel Tech ETF (AWAY): ETF Research Reports

VanEck Retail ETF (RTH): ETF Research Reports

Invesco Leisure and Entertainment ETF (PEJ): ETF Research Reports

Global X Funds Global X Millen (MILN): ETF Research Reports

AdvisorShares Restaurant ETF (EATZ): ETF Research Reports

Defiance Hotel, Airline, and Cruise ETF (CRUZ): ETF Research Reports

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