The latest crisis surrounding Evergrande resulted in some contagious selling of risk assets to start last week. Although the crisis has not gone away Jerome Powell expected the risk of contagion fall out from Evergrande to be relatively small in the US. However, it can still harm sentiment and result in selling of risk assets. However, with the return to flying happening more and more as COVID-19 is contained, will delta airlines take advantage of its great seasonal pattern?

Over the last 10 years, Delta airlines have risen 10 times between Oct 10 and Dec 15. The average rise has been 15.99% and the largest gain was in 2014 with a 45.55% rise. The smallest gain was in 2015 with a 5.74% gain. Can this great track record happen again this year?

Major Trade Risks:

  • The main risk to this trade is if US stocks see selling on a faster hiking Fed.
  • A secondary risk is if COVID-19 cases result in fresh restrictions on flying again.