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Wall Street was downbeat last week with the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 losing 4.8%, 4.1%, 5.5% and 4.5%, respectively. Hot inflation data, chances of an even hawkish Fed, global growth concerns and geopolitical tensions related to Russia and Ukraine led to the crash. Additionally, the declines came as traders weighed an ominous caution from FedEx about the global economy.
FedEx (FDX) was in the spotlight on Friday after the company removed its full-year guidance and delivered messaging around its earnings outlook, also stating that macroeconomic trends have "significantly worsened," as quoted on Yahoo Finance. Per FedEx, “global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.”
Morgan Stanley’s lead U.S. equity strategist Michael Wilson has said that while the first half of the year was disturbed by inflationary pressures and hawkish Federal Reserve policy, the remainder will be troubled by slowing growth and weakness in earnings, the Yahoo Finance article quoted.
At the beginning of the week, August inflation data came in higher-than-expected. The annual inflation rate in the United States eased for two months in a row to 8.3% in August of 2022, the lowest in four months, from 8.5% in July but above market forecasts of 8.1%. Meanwhile, core CPI, which eliminates volatile energy and food prices, increased 6.3% on a year, the most since March, and up markedly from 5.9% hit in both June and July (read: 5 Sector ETFs to Win from August Inflation Data).
The CME Group revealed that there is an 82% chance of a 0.75% rate hike this week and a 18% probability of a 1% rate hike (at the time of writing). A month ago, this data showed a 40%-60% chances between a 75-basis-point and a 50-basis-point rate hike.
No wonder, such rising rate concerns weighed on high growth sectors like technology. Tech stocks were beaten down badly last week. Against this backdrop, below we highlight a few winning ETFs of last week.
ETFs in Focus
Kraneshares European Carbon Allowance ETF (KEUA - Free Report) – Up 10.2%
The KraneShares European Carbon Allowance Strategy ETF is benchmarked to the IHS Markit Carbon EUA Index. The index tracks the most traded EUA futures contracts. The fund charges 78 bps in fees.
Simplify Tail Risk Strategy ETF – Up 9.7%
The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 50 bps in fees and yields 7.81% annually.
The underlying S&P 500 VIX Short-Term Futures Index measures the movements of a combination of VIX futures and is designed to track changes in the expectation for one month in the future. The fund charges 85 bps in fees.
The underlying IHS Markit Global Carbon Index tracks the most liquid segment of the tradable carbon credit futures markets. The fund charges 78 bps in fees.
iPatha.B Nickel Subindex TR ETN – Up 5.8%
The underlying Bloomberg Nickel Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on nickel. The note charges 45 bps in fees.
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Top-Performing ETFs of Last Week
Wall Street was downbeat last week with the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 losing 4.8%, 4.1%, 5.5% and 4.5%, respectively. Hot inflation data, chances of an even hawkish Fed, global growth concerns and geopolitical tensions related to Russia and Ukraine led to the crash. Additionally, the declines came as traders weighed an ominous caution from FedEx about the global economy.
FedEx (FDX) was in the spotlight on Friday after the company removed its full-year guidance and delivered messaging around its earnings outlook, also stating that macroeconomic trends have "significantly worsened," as quoted on Yahoo Finance. Per FedEx, “global volumes declined as macroeconomic trends significantly worsened later in the quarter, both internationally and in the U.S.”
Morgan Stanley’s lead U.S. equity strategist Michael Wilson has said that while the first half of the year was disturbed by inflationary pressures and hawkish Federal Reserve policy, the remainder will be troubled by slowing growth and weakness in earnings, the Yahoo Finance article quoted.
At the beginning of the week, August inflation data came in higher-than-expected. The annual inflation rate in the United States eased for two months in a row to 8.3% in August of 2022, the lowest in four months, from 8.5% in July but above market forecasts of 8.1%. Meanwhile, core CPI, which eliminates volatile energy and food prices, increased 6.3% on a year, the most since March, and up markedly from 5.9% hit in both June and July (read: 5 Sector ETFs to Win from August Inflation Data).
The CME Group revealed that there is an 82% chance of a 0.75% rate hike this week and a 18% probability of a 1% rate hike (at the time of writing). A month ago, this data showed a 40%-60% chances between a 75-basis-point and a 50-basis-point rate hike.
No wonder, such rising rate concerns weighed on high growth sectors like technology. Tech stocks were beaten down badly last week. Against this backdrop, below we highlight a few winning ETFs of last week.
ETFs in Focus
Kraneshares European Carbon Allowance ETF (KEUA - Free Report) – Up 10.2%
The KraneShares European Carbon Allowance Strategy ETF is benchmarked to the IHS Markit Carbon EUA Index. The index tracks the most traded EUA futures contracts. The fund charges 78 bps in fees.
Simplify Tail Risk Strategy ETF – Up 9.7%
The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 50 bps in fees and yields 7.81% annually.
Trust VIX Short-Term Futures ETF (VIXY - Free Report) – Up 7.7%
The underlying S&P 500 VIX Short-Term Futures Index measures the movements of a combination of VIX futures and is designed to track changes in the expectation for one month in the future. The fund charges 85 bps in fees.
Kfa Global Carbon ETF (KRBN - Free Report) – Up 6.4%
The underlying IHS Markit Global Carbon Index tracks the most liquid segment of the tradable carbon credit futures markets. The fund charges 78 bps in fees.
iPatha.B Nickel Subindex TR ETN – Up 5.8%
The underlying Bloomberg Nickel Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on nickel. The note charges 45 bps in fees.