ETFs to Profit From Rising Middle East Tension, Port Strike

After a solid third quarter, the U.S. stock market is now in the middle of a vicious circle of woes at the start of the new quarter. The tensions in the Middle East have intensified following Iran's launch of missiles in Israel this week and concerns over the supply chain build-up after port workers called a strike. The twin headwinds once again made investors jittery, leading to a risk-off trade.Middle East TensionIran launched about 200 ballistic missiles targeting Israel on Oct. 1, leading to growing fears of retaliation by Israel’s PM  Benjamin Netanyahu. The attack has accelerated the tensions in the Middle East region.Port StrikeAbout 50,000 workers of the International Longshoremen’s Association (ILA) went on strike at midnight over a wage claim. This is the first shutdown in the US East Coast and Gulf Coast ports in 50 years.The strike will hurt most of America’s imports and exports in what could become the country’s most disruptive work stoppage in decades. It will stop the flow of a wide variety of goods from the docks of almost all cargo ports from Maine to Texas. These include bananas, European beer, wine and liquor, along with furniture, clothing, household goods and European autos, as well as parts needed to keep U.S. factories operating and American workers in those plants on the job.The twin headwinds could send ripples across the nation and may have repercussions for global stock markets and the economy. However, some sectors or corners of the broad market are expected to gain or see increased attention amid such geopolitical tensions. We have highlighted them below:GoldThe escalating geopolitical tension and port strike have sent investors rushing for safe-haven assets like gold. This is especially true as gold is often used as a means of preserving wealth during times of financial and political uncertainty. It usually does well when other asset classes struggle. Gold price rose to a record high. SPDR Gold Trust ETF GLD tracks the price of gold bullion measured in U.S. dollars and kept in London under the custody of HSBC Bank USA.U.S. DollarThe U.S. dollar is often viewed as a “safe-haven” currency. In times of global economic uncertainty or volatility, investors tend to flock to perceived safer assets, including the U.S. dollar. Invesco DB US Dollar Index Bullish Fund UUP is the prime beneficiary of a rising dollar as it offers exposure against a basket of six world currencies. It has a Zacks ETF Rank #3 (Hold) (read: Time for Global Equities ETFs?).OilOil spiked more than 3% as rising conflict led to concerns over potential disruptions to crude supplies. Notably, the Middle East is home to almost a third of global supply. While there are several ETFs to tap the rising oil price, United States Oil Fund USO and United States Brent Oil Fund BNO provide direct play in the futures market (read: Should You Invest in Oil ETFs on Rising Middle East Tensions?).Rail and Air FreightA shutdown at ports will result in alternative ways to transport goods, bypassing strike-affected ports, thereby benefiting rail and air freight industries. iShares U.S. Transportation ETF IYT could see smooth trading in the weeks ahead as rail transportation, and air freight & logistics take the largest share in the portfolio at 26.4% and 20%, respectively. It has a Zacks ETF Rank #2 (Buy).ValueValue stocks have proven to be outperformers over the long term and are less susceptible to trending markets. These stocks have strong fundamentals — earnings, dividends, book value and cash flow — that trade below their intrinsic value and are undervalued. These have the potential to deliver higher returns and exhibit lower volatility compared with their growth and blend counterparts. Vanguard Value ETF (VTV), which targets the value segment of the broad U.S. stock market, is one of the most popular options in the value space. It currently sports a Zacks ETF Rank #1 (Strong Buy).Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR Gold Shares (GLD): ETF Research Reports Invesco DB US Dollar Index Bullish ETF (UUP): ETF Research Reports United States Oil ETF (USO): ETF Research Reports iShares U.S. Transportation ETF (IYT): ETF Research Reports United States Brent Oil ETF (BNO): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks