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Wall Street was moderately upbeat last week and exhibited a decent Santa Clause rally. The S&P 500 inched up 0.3%, the Dow Jones added about 0.8% and the Nasdaq gained about 0.1%. Broad market sentiments have turned extremely bullish due to the Fed’s dovish tone.
In the latest meeting, Federal Reserve Chair Jerome Powell hinted at a major policy shift as inflation is easing and the economy is holding up better. The central bank kept interest rates steady for the third time and penciled in three rate cuts of 75 bps for 2024. Lower interest rates generally lead to reduced borrowing costs, which can stimulate economic growth.
Benchmark U.S. Treasury yields started the week at 3.90%, hit a low of 3.79% and closed the week at 3.88%. Such a drop in yields boosted equities. Against this backdrop, below we highlight a few top-performing ETFs of last week.
The recent Red Sea attacks, primarily attributed to the Houthi rebels in response to Israel's war in Gaza, have significantly impacted global maritime activities and economic sectors. These attacks have targeted various commercial vessels, including oil tankers and cargo ships, with drones, rockets, and even direct assaults, causing major shipping companies to reroute their vessels to avoid the Red Sea, which is a crucial global shipping lane.
The series of attacks could curtail global shipping capacity by 20%, according to experts. Nearly 15% of the world’s shipping traffic has been disrupted by shipping companies avoiding the Suez Canal route due to increased risk in the Red Sea. As a result, shipping stocks rallied.
Marijuana
Subversive Cannabis ETF ) – Up 8.6%
AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) ) – Up 7.7%
The argument in favor of investing in cannabis companies has never been stronger. Across the United States, marijuana dispensaries are appearing rapidly, and the upcoming 2024 presidential election is providing motivation for drug policy reform. Hopes for Fed rate cuts in 2024 has also been acting as another tailwind.
Aluminum
USCF Aluminum Strategy Fund (ALUM - Free Report) ) – Up 6.4%
A massive fuel depot explosion on December 18 in the capital of Guinea, the world's third largest bauxite producer, triggered concerns about the crunch of material to make alumina, the substance used in producing aluminium. This has led to a surge in bauxite and aluminum prices.
Nigeria
Global X MSCI Nigeria ETF ) – Up 5.4%
The Nigerian stock market closed 2023 with a great performance, as evidenced by the closing figures on Friday in Lagos. The stocks saw an increase of 46.6%, amounting to N13 trillion. This significant growth indicates that the market value of equities surged by nearly 50% compared to the previous year. The transition to a new government in May initiated several market-friendly reforms, which in turn elevated share prices.
China Technology
KraneShares CSI China Internet ETF (KWEB - Free Report) ) – Up 4.8%
China’s stocks gained last week as the country’s tech companies continued their rise. Chinese consumer electronics company Xiaomi unveiled plans to enter China’s electric-vehicle market last week. Notably, the Chinese economy expanded by 4.9% year over year in Q3 of 2023, beating market forecasts of 4.4% and strengthening hopes that it will meet the official annual target of around 5% this year. Moreover, Chinese stocks are cheaper.
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5 Best-Performing ETFs of Last Week
Wall Street was moderately upbeat last week and exhibited a decent Santa Clause rally. The S&P 500 inched up 0.3%, the Dow Jones added about 0.8% and the Nasdaq gained about 0.1%. Broad market sentiments have turned extremely bullish due to the Fed’s dovish tone.
In the latest meeting, Federal Reserve Chair Jerome Powell hinted at a major policy shift as inflation is easing and the economy is holding up better. The central bank kept interest rates steady for the third time and penciled in three rate cuts of 75 bps for 2024. Lower interest rates generally lead to reduced borrowing costs, which can stimulate economic growth.
Benchmark U.S. Treasury yields started the week at 3.90%, hit a low of 3.79% and closed the week at 3.88%. Such a drop in yields boosted equities. Against this backdrop, below we highlight a few top-performing ETFs of last week.
ETFs in Focus
Shipping
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) ) – Up 10.7%
The recent Red Sea attacks, primarily attributed to the Houthi rebels in response to Israel's war in Gaza, have significantly impacted global maritime activities and economic sectors. These attacks have targeted various commercial vessels, including oil tankers and cargo ships, with drones, rockets, and even direct assaults, causing major shipping companies to reroute their vessels to avoid the Red Sea, which is a crucial global shipping lane.
The series of attacks could curtail global shipping capacity by 20%, according to experts. Nearly 15% of the world’s shipping traffic has been disrupted by shipping companies avoiding the Suez Canal route due to increased risk in the Red Sea. As a result, shipping stocks rallied.
Marijuana
Subversive Cannabis ETF ) – Up 8.6%
AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) ) – Up 7.7%
The argument in favor of investing in cannabis companies has never been stronger. Across the United States, marijuana dispensaries are appearing rapidly, and the upcoming 2024 presidential election is providing motivation for drug policy reform. Hopes for Fed rate cuts in 2024 has also been acting as another tailwind.
Aluminum
USCF Aluminum Strategy Fund (ALUM - Free Report) ) – Up 6.4%
A massive fuel depot explosion on December 18 in the capital of Guinea, the world's third largest bauxite producer, triggered concerns about the crunch of material to make alumina, the substance used in producing aluminium. This has led to a surge in bauxite and aluminum prices.
Nigeria
Global X MSCI Nigeria ETF ) – Up 5.4%
The Nigerian stock market closed 2023 with a great performance, as evidenced by the closing figures on Friday in Lagos. The stocks saw an increase of 46.6%, amounting to N13 trillion. This significant growth indicates that the market value of equities surged by nearly 50% compared to the previous year. The transition to a new government in May initiated several market-friendly reforms, which in turn elevated share prices.
China Technology
KraneShares CSI China Internet ETF (KWEB - Free Report) ) – Up 4.8%
China’s stocks gained last week as the country’s tech companies continued their rise. Chinese consumer electronics company Xiaomi unveiled plans to enter China’s electric-vehicle market last week. Notably, the Chinese economy expanded by 4.9% year over year in Q3 of 2023, beating market forecasts of 4.4% and strengthening hopes that it will meet the official annual target of around 5% this year. Moreover, Chinese stocks are cheaper.