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Wall Street was upbeat last week. The S&P 500 (up 4.7%), the Dow Jones (up 4.9%), the Nasdaq Composite (up 5.2%) and the Russell 2000 (up 3.6%) gained last week. Upbeat earnings and the likelihood of slower Fed rate hikes from December boosted Wall Street last week.
In remarks at a meeting Friday, San Francisco Federal Reserve President Mary Daly said the U.S. central bank should avoid sending the economy into an "unforced downturn" and that it was time to consider easing the clip of hikes, as quoted on Yahoo Finance.
There are speculations in the market that Fed policymakers are likely to deliver another interest rate increase of 0.75% at their meeting Nov. 1-2 and but are expected to discuss the possibility of a smaller increase in December, the Yahoo Finance article noted.
Production levels at U.S. factories rose for the third straight month in September, driven by growth in manufacturing activity, which has been bolstered by higher demand for consumer goods. Steady growth in industrial production and output also indicates that the manufacturing sector still hasn’t crumbled in the face of soaring inflation (read: Continued Growth in Industrial Production: Buy Industrials ETFs).
Financial earnings came in upbeat. Netflix returned to growth and spread optimism after reporting solid third-quarter 2022 results after the closing bell on Tuesday. Johnson & Johnson continued with its long streak of earnings beat. It outpaced revenue estimates and raised its full-year revenue guidance. There were a few downbeat earnings too. Among the important ones, Tesla and Snap missed earnings (read: JNJ Beats on Q3 Earnings: ETFs in Focus).
Against this backdrop, below, we highlight the top-performing ETF areas of last week.
This ETF is a great tool to fight rising rates. With the Fed likely to hike rates by 75 bps in early November, the fund has every reason to rise. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income.
Cannabis
Advisorshares Poseidon Dynamic Cannabis ETF – Up 20.3%
Advisorshares Pure US Cannabis ETF (MSOS - Free Report) – Up 16.5%
The global cannabis market is estimated to be valued at $27.7 billion in 2022 and is projected to reach $82.3 billion by 2027, recording a CAGR of 24.3% in terms of value, per ResearchAndMarkets.com, as quoted on benzinga. Plus, President Joe Biden recently pardoned all prior federal offenses of simple marijuana possession.
Dynamic Oil & Gas Services Invesco ETF (PXJ) – Up 11%
Oil prices gained as investor sentiment rose on news that China is considering an easing in the duration of quarantine for inbound visitors, per economictimes.com. Plus, OPEC+ output cut is also in place.
The rally in Brazil stocks has happened as former President Luiz Inácio Lula da Silva challenges incumbent President Jair Bolsonaro in a presidential election. Brazil's election is going into a second round on Oct 30, 2022. With almost all the votes counted, Lula had won 48% against Bolsonaro's 43% - a much closer result than opinion polls had suggested. This gives hopes of a continuation of existing policies. Plus, thanks to commodity stocks; upbeat macroeconomic data and strong corporate earnings as well as cheaper valuation Brazil stocks rallied.
The global artificial intelligence (AI) market is poised to expand into a $1,581.7 billion opportunity by 2029, up from around $65.48 billion now, growing at a CAGR of 38% from 2021 to 2030, as quoted on alliedmarketresearch.com. Such an immense opportunity and growing demand for digitization probably have boosted the space.
Aerospace & Defense
US Aerospace & Defense iShares ETF (ITA - Free Report) – Up 8.5%
Wall Street analysts are the most positive on the Defense sector, as quoted on investing.com. The latest geopolitical concerns, war between Russia and Ukraine and the resultant Western sanctions against Russia brightened the importance of the defense sector. Credit Suisse recently wrote “defense is likely to be a GDP+ growth industry for the remainder of the decade and forecast a 7.9% 8-yr CAGR for the DoD investment accounts.”
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Top-Performing ETF Areas of Last Week
Wall Street was upbeat last week. The S&P 500 (up 4.7%), the Dow Jones (up 4.9%), the Nasdaq Composite (up 5.2%) and the Russell 2000 (up 3.6%) gained last week. Upbeat earnings and the likelihood of slower Fed rate hikes from December boosted Wall Street last week.
In remarks at a meeting Friday, San Francisco Federal Reserve President Mary Daly said the U.S. central bank should avoid sending the economy into an "unforced downturn" and that it was time to consider easing the clip of hikes, as quoted on Yahoo Finance.
There are speculations in the market that Fed policymakers are likely to deliver another interest rate increase of 0.75% at their meeting Nov. 1-2 and but are expected to discuss the possibility of a smaller increase in December, the Yahoo Finance article noted.
Production levels at U.S. factories rose for the third straight month in September, driven by growth in manufacturing activity, which has been bolstered by higher demand for consumer goods. Steady growth in industrial production and output also indicates that the manufacturing sector still hasn’t crumbled in the face of soaring inflation (read: Continued Growth in Industrial Production: Buy Industrials ETFs).
Financial earnings came in upbeat. Netflix returned to growth and spread optimism after reporting solid third-quarter 2022 results after the closing bell on Tuesday. Johnson & Johnson continued with its long streak of earnings beat. It outpaced revenue estimates and raised its full-year revenue guidance. There were a few downbeat earnings too. Among the important ones, Tesla and Snap missed earnings (read: JNJ Beats on Q3 Earnings: ETFs in Focus).
Against this backdrop, below, we highlight the top-performing ETF areas of last week.
Rising Rates
Simplify Interest Rate Hedge ETF (PFIX - Free Report) – Up 20.8%
This ETF is a great tool to fight rising rates. With the Fed likely to hike rates by 75 bps in early November, the fund has every reason to rise. The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income.
Cannabis
Advisorshares Poseidon Dynamic Cannabis ETF – Up 20.3%
Advisorshares Pure US Cannabis ETF (MSOS - Free Report) – Up 16.5%
Listed Funds Trust Roundhill Cannabis ETF (WEED - Free Report) – Up 16.1%
The global cannabis market is estimated to be valued at $27.7 billion in 2022 and is projected to reach $82.3 billion by 2027, recording a CAGR of 24.3% in terms of value, per ResearchAndMarkets.com, as quoted on benzinga. Plus, President Joe Biden recently pardoned all prior federal offenses of simple marijuana possession.
Energy
Vaneck Oil Services ETF (OIH - Free Report) – Up 14%
Dynamic Oil & Gas Services Invesco ETF (PXJ) – Up 11%
Oil prices gained as investor sentiment rose on news that China is considering an easing in the duration of quarantine for inbound visitors, per economictimes.com. Plus, OPEC+ output cut is also in place.
Brazil
Brazil Franklin FTSE ETF (FLBR - Free Report) – Up 9.7%
Brazil iShares MSCI ETF (EWZ) – Up 9.64%
The rally in Brazil stocks has happened as former President Luiz Inácio Lula da Silva challenges incumbent President Jair Bolsonaro in a presidential election. Brazil's election is going into a second round on Oct 30, 2022. With almost all the votes counted, Lula had won 48% against Bolsonaro's 43% - a much closer result than opinion polls had suggested. This gives hopes of a continuation of existing policies. Plus, thanks to commodity stocks; upbeat macroeconomic data and strong corporate earnings as well as cheaper valuation Brazil stocks rallied.
Artificial Intelligence
Robotics Artificial Intelligence Direxion (UBOT - Free Report) – Up 9.0%
The global artificial intelligence (AI) market is poised to expand into a $1,581.7 billion opportunity by 2029, up from around $65.48 billion now, growing at a CAGR of 38% from 2021 to 2030, as quoted on alliedmarketresearch.com. Such an immense opportunity and growing demand for digitization probably have boosted the space.
Aerospace & Defense
US Aerospace & Defense iShares ETF (ITA - Free Report) – Up 8.5%
Wall Street analysts are the most positive on the Defense sector, as quoted on investing.com. The latest geopolitical concerns, war between Russia and Ukraine and the resultant Western sanctions against Russia brightened the importance of the defense sector. Credit Suisse recently wrote “defense is likely to be a GDP+ growth industry for the remainder of the decade and forecast a 7.9% 8-yr CAGR for the DoD investment accounts.”