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Last week was upbeat for Wall Street as vaccine hopes strengthened and consumers indulged in holiday shopping. The Dow Jones reached 30,000 for the first time in history on Nov 24 while the S&P 500, the Nasdaq and the Russell 2000 also rallied (read: Dow Hits 30K for First Time: 7 Stocks Driving the ETF Rally).
While Pfizer and Moderna already charged-up markets up with their success in COVID-19 vaccine clinical trials, AstraZeneca (AZN) said on Nov 23 that its vaccine, developed in collaboration with the University of Oxford, showed an average 70% effectiveness. Plus, Sanofi (SNY), GlaxoSmithKline's (GSK) and Johnson & Johnson (JNJ) are also working hard in the COVID-19 vaccine field.
NRF also noted last week that the retail sector has witnessed a V-shaped recovery as aggregate retail sales have grown both sequentially and year over year each month since June. For the first 10 months of this year, retail sales were up 6.4% versus the first 10 months of 2019, per NRF. Overall, the retail sector is expected to log a “strong finish” to 2020 despite COVID-19.
As a result, the S&P 500 (up 1.58%), the Dow Jones (up 1.45%), the Nasdaq Composite (up 2.53%) and the Russell 2000 (up 3.99%) – all put up a great show last week.
Below we highlight the winning ETF areas.
Cannabis
Cannabis stocks jumped last week on the news that Joe Biden's transition has formally started. Biden’s victory could speed up the legalization of marijuana at the federal level, thereby providing a boost to the U.S. cannabis industry. Earlier this month, voters in Arizona, Montana, New Jersey and South Dakota voted in favor of adult use of cannabis, bringing the total number of states that have cleared it for that purpose to 15.
The coronavirus-led global slowdown weighed on oil demand. Mounting concerns over the second wave of coronavirus cases have threatened demand further in recent sessions. However, back-to-back vaccine news has boosted the global markets as well as the energy sector. This has favored MLP ETFs like Dorsey Wright MLP Index ETN (up 19.1%) and Credit Suisse S&P MLP Index ETN Exp 04 Dec 2034 (MLPO) (up 18.8%) as these are yielding in nature. Investors target these products as good income-generating products (read: ETFs to Play as Vaccine News Looks to Outdo Virus Fear).
Small Caps
Vaccine news and stimulus hopes in the holiday season bode well for the small caps. Notably, on Nov 19, Treasury Secretary Steven Mnuchin “asked the Federal Reserve to shut down five emergency COVID-19 relief facilities and return $455 billion of unused funds, a move opposed by Fed Chairman Jerome Powell.”
In March, the Congress had approved $2.2 trillion of emergency relief under the CARES Act, which included $500 billion to enact a variety of emergency lending facilities through the Fed and guarantee loans. Out of this, only a trivial portion of the funds — $25 billion — were used. Now Mnuchin wants to discuss a stimulus package with Democrats.
Probably the unused funds will help them come up with a stimulus package which is a winning factor for the small caps. Principal U.S. Small-MidCap Multi-Factor ETF (up 15.9%) thus came across as one of the top performers.
Clean Energy
Biden has expansionary plans for clean energy. Biden is forming a plan — a Clean Energy Revolution — to address the issue of climate emergency. He sees America as becoming a 100% clean energy economy by 2035 and having net zero emission by 2050.
Biden has a $2-trillion-plan toward combating climate change that will eliminate carbon emissions from the power grid by 2035 and accelerate the uptake of electric vehicles. If this happens, the entire supply chain of the electric vehicle industry will be charged up.
Such hopes and growing global acceptance for electric vehicles went in favor of Wilderhill Clean Energy Invesco ETF (PBW - Free Report) (up 14.4%), SPDR Kensho Clean Power ETF (CNRG) (up 12.5%) and Solar Invesco ETF (TAN) (up 12.1%).
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4 Top-Performing ETF Areas of Last Week
Last week was upbeat for Wall Street as vaccine hopes strengthened and consumers indulged in holiday shopping. The Dow Jones reached 30,000 for the first time in history on Nov 24 while the S&P 500, the Nasdaq and the Russell 2000 also rallied (read: Dow Hits 30K for First Time: 7 Stocks Driving the ETF Rally).
While Pfizer and Moderna already charged-up markets up with their success in COVID-19 vaccine clinical trials, AstraZeneca (AZN) said on Nov 23 that its vaccine, developed in collaboration with the University of Oxford, showed an average 70% effectiveness. Plus, Sanofi (SNY), GlaxoSmithKline's (GSK) and Johnson & Johnson (JNJ) are also working hard in the COVID-19 vaccine field.
NRF also noted last week that the retail sector has witnessed a V-shaped recovery as aggregate retail sales have grown both sequentially and year over year each month since June. For the first 10 months of this year, retail sales were up 6.4% versus the first 10 months of 2019, per NRF. Overall, the retail sector is expected to log a “strong finish” to 2020 despite COVID-19.
As a result, the S&P 500 (up 1.58%), the Dow Jones (up 1.45%), the Nasdaq Composite (up 2.53%) and the Russell 2000 (up 3.99%) – all put up a great show last week.
Below we highlight the winning ETF areas.
Cannabis
Cannabis stocks jumped last week on the news that Joe Biden's transition has formally started. Biden’s victory could speed up the legalization of marijuana at the federal level, thereby providing a boost to the U.S. cannabis industry. Earlier this month, voters in Arizona, Montana, New Jersey and South Dakota voted in favor of adult use of cannabis, bringing the total number of states that have cleared it for that purpose to 15.
Global X Cannabis ETF (up 19.0%), Amplify Seymour Cannabis ETF (CNBS - Free Report) (up 15.6%), Advisorshares Pure Cannabis ETF (YOLO) (up 15.3%) and Alternative Harvest ETF (MJ) (up 13.5%) were huge gainers last week (read: Cannabis ETFs Surge on Kamala Harris' Decriminalizing Marijuana Pledge).
MLPs
The coronavirus-led global slowdown weighed on oil demand. Mounting concerns over the second wave of coronavirus cases have threatened demand further in recent sessions. However, back-to-back vaccine news has boosted the global markets as well as the energy sector. This has favored MLP ETFs like Dorsey Wright MLP Index ETN (up 19.1%) and Credit Suisse S&P MLP Index ETN Exp 04 Dec 2034 (MLPO) (up 18.8%) as these are yielding in nature. Investors target these products as good income-generating products (read: ETFs to Play as Vaccine News Looks to Outdo Virus Fear).
Small Caps
Vaccine news and stimulus hopes in the holiday season bode well for the small caps. Notably, on Nov 19, Treasury Secretary Steven Mnuchin “asked the Federal Reserve to shut down five emergency COVID-19 relief facilities and return $455 billion of unused funds, a move opposed by Fed Chairman Jerome Powell.”
In March, the Congress had approved $2.2 trillion of emergency relief under the CARES Act, which included $500 billion to enact a variety of emergency lending facilities through the Fed and guarantee loans. Out of this, only a trivial portion of the funds — $25 billion — were used. Now Mnuchin wants to discuss a stimulus package with Democrats.
Probably the unused funds will help them come up with a stimulus package which is a winning factor for the small caps. Principal U.S. Small-MidCap Multi-Factor ETF (up 15.9%) thus came across as one of the top performers.
Clean Energy
Biden has expansionary plans for clean energy. Biden is forming a plan — a Clean Energy Revolution — to address the issue of climate emergency. He sees America as becoming a 100% clean energy economy by 2035 and having net zero emission by 2050.
Biden has a $2-trillion-plan toward combating climate change that will eliminate carbon emissions from the power grid by 2035 and accelerate the uptake of electric vehicles. If this happens, the entire supply chain of the electric vehicle industry will be charged up.
Such hopes and growing global acceptance for electric vehicles went in favor of Wilderhill Clean Energy Invesco ETF (PBW - Free Report) (up 14.4%), SPDR Kensho Clean Power ETF (CNRG) (up 12.5%) and Solar Invesco ETF (TAN) (up 12.1%).
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 >>