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3 Momentum ETFs & Stocks to Buy as Market Bounces Back
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U.S. stocks seem to have shrugged off all uncertainties regarding nagging trade tensions between the United States and China. The one-and-a-half-month-long tech tantrums also have eased and rising rate worries have probably taken a backseat after weaker-than-expected U.S. jobs data in April.
Apple Inc. (AAPL) appeared to be the showstopper on Friday as it sprung to a record high of $184.25 during Friday on news that Warren Buffett’s Berkshire Hathaway Inc had beefed up its stake in the iPhone maker. Apple shares jumped more than 3.9% on May 4, 2018, marking the largest weekly percentage gain since October 2011.
Apple’s ascent eradicates fears about subdued iPhone demand which clouded the tech and semiconductor market a few days back. The technology giant topped the earnings and revenue estimates in the most-recent earnings report. Apple beefed up its plan to return cash to its shareholders through dividend hikes and additional buybacks (read: ETFs to Buy Post Apple's Strong Q2 Result).
On the other hand, April’s only 0.1% rise in wages was below expectations. U.S. employers added 164,000 new jobs in April, falling short of market expectations of 192,000 jobs. This means that the Fed is less likely to hurry in raising rates further. Naturally, hopes of a few more months of cheap money inflows boosted stocks in the recent session.
As a result, the three major U.S. stock indexes rose more than 1% on Friday. Three big ETFs including SPDR S&P 500 ETF (SPY - Free Report) , SPDR Dow Jones Industrial Average ETF (DIA - Free Report) and PowerShares QQQ ETF (QQQ - Free Report) added about 1.4%, 1.26% and 1.9%, respectively, on May 4.
High Momentum ETFs
Against this backdrop, investors can consider high momentum stocks and ETFs for profits. Momentum investing might be an intriguing to those seeking higher returns in a short spell. It looks to reflect profits from buying stocks that are sizzling on the market.
The Fidelity U.S. Momentum Factor Index reflects the performance of stocks of large and mid-capitalization domestic companies signaling momentum. It charges 29 bps in fees and added about 1.3% on May 7.
iShares Edge MSCI USA Momentum Factor ETF (MTUM)
This ETF seeks to track the performance of large- and mid-cap U.S. stocks exhibiting relatively higher momentum characteristics. The fund charges 15 bps in fees. It gained over 1% on May 7.
PowerShares DWA Tactical Sector Rotation ETF
The underlying index is designed to gain exposure to the strongest relative strength sectors in the United States through the universe of nine PowerShares DWA sector Momentum ETFs. It charges 75 bps in fees and was up about 0.4% on May 4.
Stock Picks
PGT Inc.
The Zacks Rank #1 (Strong Buy) company pioneered the U.S. impact-resistant window and door industry. The stock comes from a top-ranked Zacks Industry (top 12%). It has a Momentum Score of A. The stock was 3.6% on May 4.
The Zacks Rank #1 company offers a portfolio of hard disc drives, solid state drives and solid-state hybrid drives. The stock belongs to a top-ranked Zacks Industry (top 5%). It has a Momentum Score of A. The stock gained about 1.3% on May 4.
SodaStream International Ltd.
The Zacks Rank #1 company is engaged in the manufacture of home beverage carbonation systems, which enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water. The stock belongs to a top-ranked Zacks Industry (top 31%). It has a Momentum Score of A. The stock advanced about 2.4% on May 4.
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3 Momentum ETFs & Stocks to Buy as Market Bounces Back
U.S. stocks seem to have shrugged off all uncertainties regarding nagging trade tensions between the United States and China. The one-and-a-half-month-long tech tantrums also have eased and rising rate worries have probably taken a backseat after weaker-than-expected U.S. jobs data in April.
Apple Inc. (AAPL) appeared to be the showstopper on Friday as it sprung to a record high of $184.25 during Friday on news that Warren Buffett’s Berkshire Hathaway Inc had beefed up its stake in the iPhone maker. Apple shares jumped more than 3.9% on May 4, 2018, marking the largest weekly percentage gain since October 2011.
Apple’s ascent eradicates fears about subdued iPhone demand which clouded the tech and semiconductor market a few days back. The technology giant topped the earnings and revenue estimates in the most-recent earnings report. Apple beefed up its plan to return cash to its shareholders through dividend hikes and additional buybacks (read: ETFs to Buy Post Apple's Strong Q2 Result).
On the other hand, April’s only 0.1% rise in wages was below expectations. U.S. employers added 164,000 new jobs in April, falling short of market expectations of 192,000 jobs. This means that the Fed is less likely to hurry in raising rates further. Naturally, hopes of a few more months of cheap money inflows boosted stocks in the recent session.
Added to this, oil prices hit the highest level since November 2014. Tight global supplies on the Venezuela issue and the OPEC output cut deal, and the likely new U.S. sanctions against Iran led to this bump (read: Why to Consider Leveraged Oil ETFs Now).
As a result, the three major U.S. stock indexes rose more than 1% on Friday. Three big ETFs including SPDR S&P 500 ETF (SPY - Free Report) , SPDR Dow Jones Industrial Average ETF (DIA - Free Report) and PowerShares QQQ ETF (QQQ - Free Report) added about 1.4%, 1.26% and 1.9%, respectively, on May 4.
High Momentum ETFs
Against this backdrop, investors can consider high momentum stocks and ETFs for profits. Momentum investing might be an intriguing to those seeking higher returns in a short spell. It looks to reflect profits from buying stocks that are sizzling on the market.
ETF Picks
Fidelity Momentum Factor ETF (FDMO - Free Report)
The Fidelity U.S. Momentum Factor Index reflects the performance of stocks of large and mid-capitalization domestic companies signaling momentum. It charges 29 bps in fees and added about 1.3% on May 7.
iShares Edge MSCI USA Momentum Factor ETF (MTUM)
This ETF seeks to track the performance of large- and mid-cap U.S. stocks exhibiting relatively higher momentum characteristics. The fund charges 15 bps in fees. It gained over 1% on May 7.
PowerShares DWA Tactical Sector Rotation ETF
The underlying index is designed to gain exposure to the strongest relative strength sectors in the United States through the universe of nine PowerShares DWA sector Momentum ETFs. It charges 75 bps in fees and was up about 0.4% on May 4.
Stock Picks
PGT Inc.
The Zacks Rank #1 (Strong Buy) company pioneered the U.S. impact-resistant window and door industry. The stock comes from a top-ranked Zacks Industry (top 12%). It has a Momentum Score of A. The stock was 3.6% on May 4.
Seagate Technology Plc (STX - Free Report)
The Zacks Rank #1 company offers a portfolio of hard disc drives, solid state drives and solid-state hybrid drives. The stock belongs to a top-ranked Zacks Industry (top 5%). It has a Momentum Score of A. The stock gained about 1.3% on May 4.
SodaStream International Ltd.
The Zacks Rank #1 company is engaged in the manufacture of home beverage carbonation systems, which enable consumers to transform ordinary tap water instantly into carbonated soft drinks and sparkling water. The stock belongs to a top-ranked Zacks Industry (top 31%). It has a Momentum Score of A. The stock advanced about 2.4% on May 4.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>