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The S&P 500 logged its biggest weekly gain since November as Big Tech stocks rallied. With this, U.S. stocks pared their April losses on Apr 26. The S&P 500 advanced 2.7% last week, the Dow Jones inched up 0.7% and the Nasdaq jumped 4.2%. Let’s highlight the key events of the last week.
Best Week for “Magnificent Seven” Since November
The batch of tech giants known as the “Magnificent Seven” regained some of its momentum at the end of the week, following positive earnings reports from Google-parent Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .
Alphabet which gained 11.3% last week on the back of upbeat earnings, became the fourth U.S. company to reach the $2-trillion market cap milestone. On the other hand, Facebook-parent Meta (META) offered downbeat revenue guidance and saw shares slumping 9.4% last week. Tesla (TSLA - Free Report) gained 19.7% on future affordable EV plans despite the Q1 miss.
Most tech companies’ promise to spend big on the AI revolution boosted the NVIDIA (NVDA) stock, which jumped 12.3% last week. Meanwhile, MSFT, Amazon (AMZN) and Apple (AAPL) recorded modest gains of 1.6%, 1.5% and 2.1%, respectively.
Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA and Tesla collectively added $686 billion in market value, in their strongest weekly performance since the week ending Nov 3, 2023, according to Dow Jones Market Data, as quoted on MarketWatch. However, despite last week's resurgence, both Apple and Tesla remain in negative territory for the year.
U.S. Economic Growth Slowed in Q1
The U.S. economy expanded at the slowest pace in two years, with GDP rising 1.6% annually in the first quarter, missing Wall Street expectations of a 2.4% increase. The growth reflects a clear slowdown from the 3.4% increase in the fourth quarter of 2023 and was also much lower than the 4.9% reported in the year-ago quarter (read: GDP Growth Slows in Q1: 5 ETFs to Invest In).
U.S. Core PCE Inflation Rises Faster Than Expected
U.S. inflation, as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, rose to 2.7% on a yearly basis in March from 2.5% in February. This reading came in above the market expectation of 2.6% (read: 4 ETF Areas to Play Amid Slower Growth & Rising Inflation).
The core PCE Price Index, which excludes volatile food and energy prices, held steady at 2.8% on a yearly basis, surpassing analysts' estimate of 2.6%.On a monthly basis, the PCE Price Index and the core PCE Price Index both rose 0.3%.
Core Personal Consumption Expenditures (PCE) index surged 3.7% year over year in the first quarter. This topped estimates of 3.4% and marked a substantial increase from the 2% gain in the previous quarter. This surge in inflation raised doubts about the sooner-than-expected U.S. interest rate cuts.
The U.S. 10-year Treasury yield reached 4.70% on Apr 25, 2024, marking the first time since early November. However, the yield closed the week at 4.67%. Markets are now pricing in only one interest rate cut this year, reflecting a significant shift from the earlier projections. Powell's recent statements, which stress the need for “greater confidence” in the decline of inflation before considering rate cuts, also reinforced this sentiment.
Best ETFs in Focus
Against this backdrop, below we highlight a few winning ETFs of last week.
KraneShares CSI China Internet ETF (KWEB - Free Report) – Up 12.9%
The underlying CSI Overseas China Internet Index is designed to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are in the Internet and Internet-related sectors. The fund charges 69 bps in fees.
KraneShares Hang Seng TECH Index ETF (KTEC - Free Report) – Up 12.6%
The underlying Hang Seng TECH Index captures the 30 largest companies rapidly growing technology sector in Hong Kong. The fund charges 69 bps in fees.
The underlying Solactive Blockchain Index provides exposure to companies that are positioned to benefit from further advances in the field of blockchain technology. The fund charges 50 bps in fees.
VanEck Digital Transformation ETF (DAPP - Free Report) – 12.4%
The underlying MVIS Global Digital Assets Equity Index is a rules-based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the global digital asset segment. The fund charges 51 bps in fees.
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 11.2%
The First Trust SkyBridge Crypto Industry and Digital Economy ETF seeks to provide investors with capital appreciation. The fund charges 85 bps in fees.
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5 ETF Winners of the Last Week
The S&P 500 logged its biggest weekly gain since November as Big Tech stocks rallied. With this, U.S. stocks pared their April losses on Apr 26. The S&P 500 advanced 2.7% last week, the Dow Jones inched up 0.7% and the Nasdaq jumped 4.2%. Let’s highlight the key events of the last week.
Best Week for “Magnificent Seven” Since November
The batch of tech giants known as the “Magnificent Seven” regained some of its momentum at the end of the week, following positive earnings reports from Google-parent Alphabet (GOOGL - Free Report) and Microsoft (MSFT - Free Report) .
Alphabet which gained 11.3% last week on the back of upbeat earnings, became the fourth U.S. company to reach the $2-trillion market cap milestone. On the other hand, Facebook-parent Meta (META) offered downbeat revenue guidance and saw shares slumping 9.4% last week. Tesla (TSLA - Free Report) gained 19.7% on future affordable EV plans despite the Q1 miss.
Most tech companies’ promise to spend big on the AI revolution boosted the NVIDIA (NVDA) stock, which jumped 12.3% last week. Meanwhile, MSFT, Amazon (AMZN) and Apple (AAPL) recorded modest gains of 1.6%, 1.5% and 2.1%, respectively.
Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA and Tesla collectively added $686 billion in market value, in their strongest weekly performance since the week ending Nov 3, 2023, according to Dow Jones Market Data, as quoted on MarketWatch. However, despite last week's resurgence, both Apple and Tesla remain in negative territory for the year.
U.S. Economic Growth Slowed in Q1
The U.S. economy expanded at the slowest pace in two years, with GDP rising 1.6% annually in the first quarter, missing Wall Street expectations of a 2.4% increase. The growth reflects a clear slowdown from the 3.4% increase in the fourth quarter of 2023 and was also much lower than the 4.9% reported in the year-ago quarter (read: GDP Growth Slows in Q1: 5 ETFs to Invest In).
U.S. Core PCE Inflation Rises Faster Than Expected
U.S. inflation, as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, rose to 2.7% on a yearly basis in March from 2.5% in February. This reading came in above the market expectation of 2.6% (read: 4 ETF Areas to Play Amid Slower Growth & Rising Inflation).
The core PCE Price Index, which excludes volatile food and energy prices, held steady at 2.8% on a yearly basis, surpassing analysts' estimate of 2.6%.On a monthly basis, the PCE Price Index and the core PCE Price Index both rose 0.3%.
Core Personal Consumption Expenditures (PCE) index surged 3.7% year over year in the first quarter. This topped estimates of 3.4% and marked a substantial increase from the 2% gain in the previous quarter. This surge in inflation raised doubts about the sooner-than-expected U.S. interest rate cuts.
The U.S. 10-year Treasury yield reached 4.70% on Apr 25, 2024, marking the first time since early November. However, the yield closed the week at 4.67%. Markets are now pricing in only one interest rate cut this year, reflecting a significant shift from the earlier projections. Powell's recent statements, which stress the need for “greater confidence” in the decline of inflation before considering rate cuts, also reinforced this sentiment.
Best ETFs in Focus
Against this backdrop, below we highlight a few winning ETFs of last week.
KraneShares CSI China Internet ETF (KWEB - Free Report) – Up 12.9%
The underlying CSI Overseas China Internet Index is designed to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are in the Internet and Internet-related sectors. The fund charges 69 bps in fees.
KraneShares Hang Seng TECH Index ETF (KTEC - Free Report) – Up 12.6%
The underlying Hang Seng TECH Index captures the 30 largest companies rapidly growing technology sector in Hong Kong. The fund charges 69 bps in fees.
Global X Blockchain ETF (BKCH - Free Report) – Up 12.4%
The underlying Solactive Blockchain Index provides exposure to companies that are positioned to benefit from further advances in the field of blockchain technology. The fund charges 50 bps in fees.
VanEck Digital Transformation ETF (DAPP - Free Report) – 12.4%
The underlying MVIS Global Digital Assets Equity Index is a rules-based, modified capitalization weighted, float adjusted index intended to give investors a means of tracking the overall performance of the global digital asset segment. The fund charges 51 bps in fees.
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 11.2%
The First Trust SkyBridge Crypto Industry and Digital Economy ETF seeks to provide investors with capital appreciation. The fund charges 85 bps in fees.