US Global Jets index (JETS)

Executive Summary

JETS has pulled back 4.09% to $31.86 since the July 1 report, retracing a portion of the June rally that carried the ETF to a record $34.66, though year-to-date performance remains firmly positive at +13.50%. The decline appears technical in nature, occurring alongside continued fundamental strength including record U.S. jet fuel demand and expanding private aviation markets. Near-term stabilization is suggested by a +4.42% five-day rebound and a +2.87% daily gain as the ETF tests support near prior breakout levels.

Key Updates

Since the July 1 report at $33.22, JETS has declined 4.09% to the current $31.86, reversing some of the gains that previously broke resistance and briefly touched the record $34.66 level cited in the June 30 data. The 1-month return has turned negative at -4.27%, though the most recent 5-day and 1-day performance have flipped positive at +4.42% and +2.87% respectively, indicating potential short-term stabilization. New fundamental data points include record U.S. jet fuel demand of 2.15 million barrels per day for the week ended July 17, surpassing the previous record from December 2017, driven by World Cup-related travel. Additionally, private aviation continues to exhibit robust expansion tied to IPO activity and ultra-high-net-worth population growth.

Current Trend

The dominant trend remains upward, supported by YTD gains of +13.50% and 6-month returns of +15.06%. However, near-term momentum has deteriorated, with the ETF down 4.27% over the past month and 4.09% since the last report. Price action has retreated from the record $34.66 high to trade near the $31.86 level, approaching the prior YTD high zone of $31.96 established on June 24. The recent positive 5-day and 1-day performance suggests initial demand at lower levels, though the ETF must reclaim the $33.00-$34.66 zone to re-establish bullish momentum.

Investment Thesis

The investment thesis rests on a convergence of resilient commercial air travel demand, airline margin expansion from reduced jet fuel costs, supply-constrained pricing power, and secular growth in private aviation. Commercial passenger volumes remain elevated, evidenced by TSA checkpoint volumes exceeding 2.9 million on July 19 and record jet fuel demand. Jet fuel prices near $2.90 per gallon, down from nearly $5 in April, directly improve cost structures for carriers where fuel represents 25-30% of operating expenses. Average ticket prices rose 18% year-over-year in May, supported by capacity constraints from Spirit Airlines' collapse and OEM delivery backlogs. Private aviation adds a non-commercial demand pillar, with strong correlations to IPO activity and UHNW population expansion.

Thesis Status

The investment thesis remains intact and fundamentally supported. The 4.09% pullback since the last report has not coincided with any deterioration in the underlying drivers; rather, demand data has strengthened further with record jet fuel consumption. The correction appears to reflect profit-taking after a rapid 13% June rally and record highs, rather than a fundamental breakdown. The risk/opportunity profile has modestly improved for entry as the ETF retraces to levels near the June breakout zone, though failure to hold the $31.00-$32.00 area would warrant reassessment.

Key Drivers

• Record Jet Fuel Demand: U.S. jet fuel demand hit a record 2.15 million bpd for the week ended July 17, surpassing the December 2017 record, driven by World Cup-related travel with TSA volumes above 2.9 million passengers on July 19. Reuters
• Private Aviation Expansion: YTD 2026 IPO proceeds reached $125.6 billion, nearly triple 2025 levels, with a 70% historical correlation to jet deliveries; the global UHNW population has grown 5% annually since 2019 and correlates 83% with business jet departures. Forbes
• Jet Fuel Cost Relief: Jet fuel prices declined to approximately $2.90 per gallon from nearly $5 in early April following a U.S.-Iran cease-fire, with crude oil futures falling about 20% in June, driving significant margin expansion potential. Morningstar
• Pricing Power and Capacity Constraints: Average ticket prices increased 18% year-over-year in May, with economy fares up over 20%, supported by industry capacity constraints from Spirit Airlines' collapse and Boeing/Airbus delivery backlogs. Morningstar

Technical Analysis

The ETF is currently trading at $31.86, having pulled back from the record $34.66 high and the July 1 report level of $33.22. The 4.09% decline since the last report and 4.27% monthly drop indicate near-term corrective action following an extended rally. Key support is emergent near the $31.96 prior YTD high region from June 24, with current price action testing this former resistance-turned-support zone. The sharp +4.42% five-day rebound and +2.87% daily gain suggest short-term accumulation, though reclaiming the $33.22-$34.66 zone is necessary to re-establish bullish continuity. Failure to hold above $31.50-$32.00 would risk a deeper retracement toward the June 18 breakout area near $31.07.

Bull Case

• Record U.S. jet fuel demand of 2.15 million bpd demonstrates exceptional and tangible passenger volume strength, with TSA checkpoint data confirming sustained commercial travel momentum. Reuters
• Jet fuel prices near $2.90 per gallon, down sharply from nearly $5 in April, provide direct operating margin expansion for commercial carriers where fuel comprises 25-30% of costs. Morningstar
• Private aviation is experiencing robust secular growth driven by $125.6 billion in YTD IPO proceeds and a 5% annual expansion in the global UHNW population, which correlates 83% with business jet departures. Forbes
• Industry pricing power remains firm with average ticket prices up 18% YoY and economy fares rising over 20%, supported by structural capacity constraints from carrier failures and OEM delivery backlogs. Morningstar
• Near-term price stabilization is evident through a +4.42% five-day rebound and +2.87% daily gain, suggesting institutional demand at lower levels following the 4.27% monthly correction.

Bear Case

• The 4.27% monthly decline and 4.09% drop since the last report indicate near-term technical deterioration and potential profit-taking after the ETF reached a record $34.66, raising the risk of a deeper retracement. Morningstar
• The record jet fuel demand figure was explicitly driven by the World Cup final, an event-specific catalyst that is non-recurring and may overstate sustainable baseline demand once tournament-related travel concludes. Reuters
• The ETF surged 13% in June to a record $34.66, positioning the index for profit-taking and mean reversion following a rapid appreciation that may have front-run fundamental improvements. Morningstar
• Jet fuel price relief to approximately $2.90 per gallon was directly attributed to a U.S.-Iran cease-fire agreement, introducing geopolitical dependency into the margin expansion thesis should conditions deteriorate. Morningstar
• Major carrier earnings reports, which began in mid-July according to prior schedules, carry execution risk and potential for guidance revisions that could challenge the bullish narrative embedded in the record highs. Morningstar
• Private aviation demand exhibits high correlation to IPO cycles and UHNW wealth creation, exposing the segment to potential normalization after an exceptional $125.6 billion YTD IPO issuance pace. Forbes