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Wall Street was pretty upbeat in October. The S&P 500 (up 5.7%), the Dow Jones (up 4.35%), the Nasdaq Composite (up 6.40%) and the Russell 2000 (up 2.5%) – all delivered superb performance. Let’s delve a little deeper and find out which factors drove the Wall Street last month.
Upbeat Start to Q3 Earnings Season
The earnings season has been upbeat. Per Zacks Earnings Trends issued on Oct 20, 2021, for the 69 S&P 500 members that have reported Q3 results through October 20, total earnings and revenues were up +35.3% and +12.9%, respectively from the same period last year, with 87.0% beating EPS estimates and 72.5% beating revenue estimates. The proportion of these 69 index members beating both EPS and revenue estimates is 66.7%.
Q3 U.S. GDP Data Short of Expectations
The American economy grew an annualized 2% in Q3 of 2021, falling shy of market forecasts of 2.7% and slowing sharply from 6.7% in Q2. It is the weakest growth of pandemic recovery as government support is fading and a surge in Delta-variant related COVID-19 cases and global supply chain issues hurt consumption and production in the period (read: 5 ETFs to Win Despite Downbeat U.S. GDP Growth).
This has probably fueled the bet over later-than-expected rate hike possibility. The benchmark U.S. treasury yield dropped to 1.55% on Oct 29 from the monthly high of 1.68% recorded on Oct 21. However, the month started with 1.48% benchmark treasury yield. PIMCO 25+ Year Zero Coupon US Treasury Index ETF (ZROZ - Free Report) was up 4% in the month.SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) has added 9% in the month.
Launch of Bitcoin Futures ETFs
October will be long-remembered due to the launch of first bitcoin futures ETF. The first-ever bitcoin ETF — ProShares Bitcoin Strategy ETF (BITO - Free Report) — went live on Oct 19 and has attracted more than billion dollars of capital in just two days. This makes BITO the fastest ETF to reach the $1 billion milestone in history. Currently, the ETF has AUM of $1.18 billion.
The second ETF in the space — Valkyrie Bitcoin Strategy ETF (BTF - Free Report) — launched on Oct 22 has accumulated $51.1 million in its asset base. The third product in the space is expected to be from VanEck named VanEck Bitcoin Strategy ETF (XBTF). The enthusiasm over ETFs has pushed the cryptocurrency to new all-time highs to above $66,000 in October (read: What You Should Know About Bitcoin ETFs).
Tesla’s Touch to One-Trillion Mark
Tesla Motors (TSLA - Free Report) joined an exclusive club of mega-cap technology companies, which includes Apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT) and Alphabet (GOOGL), after crossing the trillion-dollar in market capitalization for the first time in late October.
The rally came after the news of the biggest-ever order from Hertz. The rally was also driven by the news that the company's Model 3 become the first electric vehicle to top monthly sales of new cars in Europe, beating stalwarts like the Renault Clio and Volkswagen Golf. Tesla-heavy Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) jumped 23.6% in October.
Energy Rally Continue
Energy rally continued in the month with United States Oil Fund, LP (USO) gaining about 8.7%. Oil prices have been surging over the past few weeks, driven mainly by supply disruptions and rising demand. Brent crude prices topped $85 per barrel in October, for the first time since late 2014, and up about 125% from the end of October 2019. Per WSJ, many traders are again betting that crude would top $100 a barrel by the year-end (read: Why Oil & Gas ETFs are Surging Again).
COP-26 & Gains in Alternative Energy
With COP-26 taking place in late-October and delegates from about 200 countries to be announcing how they will cut emissions by 2030, alternative energy had every reason to rally. Hydrogen is often touted as the fuel of the future as the world transitions away from fossil fuels. As a result, Global X Hydrogen ETF (HYDR - Free Report) and solar energy ETF Solar Invesco ETF (TAN) logged gains. Both ETFs gained more than 20% in the month.
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Top ETF Stories of October
Wall Street was pretty upbeat in October. The S&P 500 (up 5.7%), the Dow Jones (up 4.35%), the Nasdaq Composite (up 6.40%) and the Russell 2000 (up 2.5%) – all delivered superb performance. Let’s delve a little deeper and find out which factors drove the Wall Street last month.
Upbeat Start to Q3 Earnings Season
The earnings season has been upbeat. Per Zacks Earnings Trends issued on Oct 20, 2021, for the 69 S&P 500 members that have reported Q3 results through October 20, total earnings and revenues were up +35.3% and +12.9%, respectively from the same period last year, with 87.0% beating EPS estimates and 72.5% beating revenue estimates. The proportion of these 69 index members beating both EPS and revenue estimates is 66.7%.
Q3 U.S. GDP Data Short of Expectations
The American economy grew an annualized 2% in Q3 of 2021, falling shy of market forecasts of 2.7% and slowing sharply from 6.7% in Q2. It is the weakest growth of pandemic recovery as government support is fading and a surge in Delta-variant related COVID-19 cases and global supply chain issues hurt consumption and production in the period (read: 5 ETFs to Win Despite Downbeat U.S. GDP Growth).
This has probably fueled the bet over later-than-expected rate hike possibility. The benchmark U.S. treasury yield dropped to 1.55% on Oct 29 from the monthly high of 1.68% recorded on Oct 21. However, the month started with 1.48% benchmark treasury yield. PIMCO 25+ Year Zero Coupon US Treasury Index ETF (ZROZ - Free Report) was up 4% in the month.SPDR Portfolio S&P 500 Growth ETF (SPYG - Free Report) has added 9% in the month.
Launch of Bitcoin Futures ETFs
October will be long-remembered due to the launch of first bitcoin futures ETF. The first-ever bitcoin ETF — ProShares Bitcoin Strategy ETF (BITO - Free Report) — went live on Oct 19 and has attracted more than billion dollars of capital in just two days. This makes BITO the fastest ETF to reach the $1 billion milestone in history. Currently, the ETF has AUM of $1.18 billion.
The second ETF in the space — Valkyrie Bitcoin Strategy ETF (BTF - Free Report) — launched on Oct 22 has accumulated $51.1 million in its asset base. The third product in the space is expected to be from VanEck named VanEck Bitcoin Strategy ETF (XBTF). The enthusiasm over ETFs has pushed the cryptocurrency to new all-time highs to above $66,000 in October (read: What You Should Know About Bitcoin ETFs).
Tesla’s Touch to One-Trillion Mark
Tesla Motors (TSLA - Free Report) joined an exclusive club of mega-cap technology companies, which includes Apple (AAPL), Amazon.com (AMZN), Microsoft (MSFT) and Alphabet (GOOGL), after crossing the trillion-dollar in market capitalization for the first time in late October.
The rally came after the news of the biggest-ever order from Hertz. The rally was also driven by the news that the company's Model 3 become the first electric vehicle to top monthly sales of new cars in Europe, beating stalwarts like the Renault Clio and Volkswagen Golf. Tesla-heavy Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) jumped 23.6% in October.
Energy Rally Continue
Energy rally continued in the month with United States Oil Fund, LP (USO) gaining about 8.7%. Oil prices have been surging over the past few weeks, driven mainly by supply disruptions and rising demand. Brent crude prices topped $85 per barrel in October, for the first time since late 2014, and up about 125% from the end of October 2019. Per WSJ, many traders are again betting that crude would top $100 a barrel by the year-end (read: Why Oil & Gas ETFs are Surging Again).
COP-26 & Gains in Alternative Energy
With COP-26 taking place in late-October and delegates from about 200 countries to be announcing how they will cut emissions by 2030, alternative energy had every reason to rally. Hydrogen is often touted as the fuel of the future as the world transitions away from fossil fuels. As a result, Global X Hydrogen ETF (HYDR - Free Report) and solar energy ETF Solar Invesco ETF (TAN) logged gains. Both ETFs gained more than 20% in the month.