The average performance of the S&P 500 Technology sector relative to the S&P 500 Index 12 months before and after the first increase in the Federal Reserve Bank’s federal funds target rate in the past five rate-hike cycles, as identified by Ned Davis Research.
The outperformance of NDX was the joint effect of having the highest EPS growth and a more favorable valuation matrix,” says Richard Lin of Nasdaq.
“The higher EPS growth is priced into the equity valuation and offsets the deterioration of discount rate due to rising rates,” concludes Lin.
“Omicron continues to be a concern, and while there’s still a lot more we don’t know than we do know about the latest strain, reports continue to suggest that despite the higher transmissibility, its impact has not been nearly as harsh,” Bespoke Investment Group, wrote in a note early Monday, Business Insider reports.
In the recent webcast, Can Investors Capitalize on Supply Chain Disruptions? New ETF Opportunity, Frank Holmes, CEO of U.S. Global Investors, highlighted the potential opportunity in the global shipping industry, with roughly 80% of the world volume in trade goods carried by seah, and the percentage is even higher for developing countries.
“Since inception, WGRO maintained an over-weight allocation to the Consumer Discretionary sector relative to the S&P 500 and Russell 1000 Growth Indexes.Currently, WGRO allocates almost 19% of its roster to consumer cyclical stocks, making its third-largest sector weight a significant overweight to that group relative to the S&P 500.
According to data analytics firm Adara, hotel bookings in the U.S. for business purposes are skyrocketing among travelers from Europe, the Middle East and Africa (EMEA). According to its most recent report, the U.S. trade group believes airline revenues could fully recover to 2019 levels by the second half of next year.
In April 2020, OPEC made the unprecedented decision to clip nearly 10 million barrels per day from the market as the pandemic sapped demand for petroleum products. However, if the Biden administration and its allies are able to successfully release crude into the markets, short ETFs like the ProShares UltraShort Bloomberg Crude Oil (SCO) could see considerable gains, even if short-lived.
Low-volatility exchange traded funds and their underlying indexes are, for the most part, intended to be sector agnostic. Perhaps not surprisingly, SPLV currently allocates about 40% of its weight to the consumer staples and utilities sectors, two groups with long-running reputations for being docile relative to other sectors.
The upcoming holiday travel season would appear to be an opportune time to consider an exchange traded fund such as the ALPS Global Travel Beneficiaries ETF ( JRNY ), but investors might not want wait much longer because some JRNY components are already surging.
Financial advisors who are looking for an edge can consider several unique approaches for these unprecedented markets. In the recent webcast, Why Sector and Factor Rotation May Solve Today’s Market Puzzle , Matthew Bartolini, head of SPDR® Americas research at State Street Global Advisors, noted the benefits of sector-specific exchange traded funds that have helped investors gain exposure to specific market segments and target rising trends.
Smaller energy companies have been more nimble in capitalizing on the surge in crude oil prices, helping exchange traded funds that track the small-cap energy segment outperform.
Transitory to long-term inflation forecasts and an energy crisis could provide an economic backdrop for base metals and the Invesco DB Base Metals Fund (DBB) to thrive. Rising oil prices are causing consumers pain at the pump, while the macroeconomic environment is seeing high prices across the board for commodities.
The Barron’s 400 ETF (BFOR US) , an NYSE Arca -listed ETF tracking the Barron’s 400 Index (B400), has pivoted towards cyclical sectors following the semi-annual reconstitution and rebalance of its underlying index. B400 has pivoted towards cyclical sectors following its latest reconstitution.
Energy exchange traded funds continue to strengthen as a global energy crunch supports strong demand heading into the winter months. On Friday, the ALPS Alerian MLP ETF (NYSEArca: AMLP) increased 0.3%, and the JPMorgan Alerian MLP Index ETN (NYSEArca: AMJ) advanced 0.3%.The more widely observed Energy Select Sector SPDR Fund (NYSEArca: XLE) was 0.6% higher.
