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What September Lull? 4 ETF Areas That Are Up At Least 10%
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True to its ill-reputation, the month of September was downbeat for Wall Street. The S&P 500, the Dow Jones and the Nasdaq Composite lost about 3.64%, 2.61% and 5.21% in the past, respectively. The key reasons for such underperformance were the Fed’s indication that it will start QE tapering in November along with China’s real estate behemoth Evergrande’s default risks and its ripples effects on the global market. Evergrande fears shook the markets on a potential Lehman-like crisis.
However, equity investors brushed aside uncertainty over monetary and fiscal policies and the ongoing debates in Washington over the debt ceiling in late September. The buy-the-dip strategy also helped to boost equities. Cyclical sectors outperformed as the Federal Reserve stressed on economic progress. But the relief was short-lived as treasury yields shot up to 1.55% on Sep 29 versus the month’s low of 1.28% recorded on Sep 24. There were broad-based selloffs (especially in growth stocks) in the market.
Against this backdrop, we highlight a few ETF areas that stood tall amid the crisis in September.
Uranium
Northshore Global Uranium Mining ETF (URNM - Free Report) – Up 30.0%
Global X Uranium ETF (URA) – Up 17.7%
The uranium stocks and ETFs registered an uptrend largely due to growing interest on Reddit’s WallStreetBets forum. Notably, large purchases of the metal by the Sprott Physical Uranium Trust, a Canadian Closed End Fund (CEF), have led prices to their highest levels since 2014. There is rising demand for uranium from China and India as these countries try to meet the growing electricity demand while managing air pollution problems.
Oil & Gas
iPath.B Natural Gas Subindex ETN – Up 22.9%
US Natural Gas Fund (UNG) – Up 22.8%
Vaneck Unconventional Oil & Gas ETF – Up 21.7%
DWA Energy Momentum Invesco ETF (PXI - Free Report) – Up 20.1%
Oil and gas prices have been super-sturdy in September. Oil crossed the $75 level.Brent hit the highest level since October 2018. The rally has been driven by supply disruptions and storage drawdowns as well as growing demand with the easing of pandemic restrictions. Oil drillers in the Gulf of Mexico are still struggling to restore output more than two weeks after Hurricane Ida made landfall on the coast of Louisiana, with almost a third of production still idled. Meanwhile, natural gas prices spiked to a seven-year high buoyed by the growing concerns over tight winter supplies as well as the expiration of October options (read: Best Performing Stocks of the Top US ETF of September).
The demand for shipping is high considering the improvement in global economic growth and a commodity boom from easing COVID-led restrictions. These factors are leading to very high freight rates. The space is also getting support from easy monetary and fiscal policies, supply-chain issues caused due to COVID-19 and higher demand from e-commerce companies.
The United States will likely relax travel restrictions in November for international visitors vaccinated against COVID-19, including those from the U.K. and EU, the White House said recently, as quoted on CNBC. Foreigners visiting the United States will have to show proof of vaccination and a negative COVID-19 test taken within three days of departure. The White House announcement came following the peak summer travel season, indicating solid holiday travel demand.
Airlines have urged the Biden administration to lift the rules that have upset demand for international travel. The changes will be put into effect in early November, which will aid the holiday bookings. No wonder, all tour and travel-related stocks have surged in September.
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What September Lull? 4 ETF Areas That Are Up At Least 10%
True to its ill-reputation, the month of September was downbeat for Wall Street. The S&P 500, the Dow Jones and the Nasdaq Composite lost about 3.64%, 2.61% and 5.21% in the past, respectively. The key reasons for such underperformance were the Fed’s indication that it will start QE tapering in November along with China’s real estate behemoth Evergrande’s default risks and its ripples effects on the global market. Evergrande fears shook the markets on a potential Lehman-like crisis.
However, equity investors brushed aside uncertainty over monetary and fiscal policies and the ongoing debates in Washington over the debt ceiling in late September. The buy-the-dip strategy also helped to boost equities. Cyclical sectors outperformed as the Federal Reserve stressed on economic progress. But the relief was short-lived as treasury yields shot up to 1.55% on Sep 29 versus the month’s low of 1.28% recorded on Sep 24. There were broad-based selloffs (especially in growth stocks) in the market.
Against this backdrop, we highlight a few ETF areas that stood tall amid the crisis in September.
Uranium
Northshore Global Uranium Mining ETF (URNM - Free Report) – Up 30.0%
Global X Uranium ETF (URA) – Up 17.7%
The uranium stocks and ETFs registered an uptrend largely due to growing interest on Reddit’s WallStreetBets forum. Notably, large purchases of the metal by the Sprott Physical Uranium Trust, a Canadian Closed End Fund (CEF), have led prices to their highest levels since 2014. There is rising demand for uranium from China and India as these countries try to meet the growing electricity demand while managing air pollution problems.
Oil & Gas
iPath.B Natural Gas Subindex ETN – Up 22.9%
US Natural Gas Fund (UNG) – Up 22.8%
Vaneck Unconventional Oil & Gas ETF – Up 21.7%
DWA Energy Momentum Invesco ETF (PXI - Free Report) – Up 20.1%
Oil and gas prices have been super-sturdy in September. Oil crossed the $75 level.Brent hit the highest level since October 2018. The rally has been driven by supply disruptions and storage drawdowns as well as growing demand with the easing of pandemic restrictions. Oil drillers in the Gulf of Mexico are still struggling to restore output more than two weeks after Hurricane Ida made landfall on the coast of Louisiana, with almost a third of production still idled. Meanwhile, natural gas prices spiked to a seven-year high buoyed by the growing concerns over tight winter supplies as well as the expiration of October options (read: Best Performing Stocks of the Top US ETF of September).
Shipping
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 18.9%
The demand for shipping is high considering the improvement in global economic growth and a commodity boom from easing COVID-led restrictions. These factors are leading to very high freight rates. The space is also getting support from easy monetary and fiscal policies, supply-chain issues caused due to COVID-19 and higher demand from e-commerce companies.
Travel
Etfmg 2X Daily Travel Tech ETF (AWAY - Free Report) – Up 14.5%
The United States will likely relax travel restrictions in November for international visitors vaccinated against COVID-19, including those from the U.K. and EU, the White House said recently, as quoted on CNBC. Foreigners visiting the United States will have to show proof of vaccination and a negative COVID-19 test taken within three days of departure. The White House announcement came following the peak summer travel season, indicating solid holiday travel demand.
Airlines have urged the Biden administration to lift the rules that have upset demand for international travel. The changes will be put into effect in early November, which will aid the holiday bookings. No wonder, all tour and travel-related stocks have surged in September.