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U.S. stocks have been steady, of late, with investors shifting focus to the reopening of economy and an improvement in virus cases.Recent data points show that the outbreak is gradually coming under control, even in the hardest-hit states.
The U.S. weekly jobless claims dropped to 963,000, marking the first time below 1 million since mid-March. The data also came in better than the Wall Street estimate of 1.1 million. Plus, the U.S. economy added 1.76 million jobs in July. The reading beat market expectations of a 1.6-million increase.Average hourly earnings for all employees on private non-farm payrolls went up 7 cents to $29.39.
The U.S. ISM Manufacturing PMI came in at 54.2 for July 2020, up from the 52.6 recorded in the previous month and surpassing market expectations of 53.6. That is the highest reading since March 2019, as manufacturing activity is recovering after the disturbance caused by the pandemic. U.S. manufacturers expanded in July for the third successive month.
In addition, developments in the treatment and vaccine phases have been encouraging. President Trump announced that the U.S. government will buy 100 million doses of its coronavirus vaccine from Moderna. Moreover, vaccine candidates from Pfizer, Johnson & Johnson and Astrazeneca are showing hopes.
Though complete normalcy is not possible right now, investors look hopeful about market recovery. Some laggards amid the peak of the pandemic are emerging as leaders. Below we highlight some of the ETFs. All these ETFs beat the S&P 500 in the past month (up 6.2%).
U.S. Global Jets ETF (JETS - Free Report) – Up 9.1% Past Month
Airline stocks bounced back strongly this week on a rebound in travel demand. This is especially true as the number of people going through airport security screening checkpoints hit a five-month high last weekend. Uptick in consumer confidence and some federal aid have been aiding airlines ETF (read: Airline ETF Takes Off: Will The Surge Continue?).
VanEck Vectors Gaming ETF (BJK - Free Report) – Up 14.1% Past Month
The MVIS Global Gaming Index tracks the overall performance of companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. One of the components of the fund — MGM Resorts (MGM) — jumped after Barry Diller’s IAC/InterActiveCorp. (IAC) bought a 12% equity stake in the casino company. The bet was mainly to cash in on the recent rise in online gambling.
First Trust NASDAQ Global Auto ETF (CARZ - Free Report) – Up 10.9% Past Month
SPDR SP Bank ETF (KBE - Free Report) – Up 16.2% Past Month
Talks of reopening the economy and government stimulus have reduced the delinquency risks for pint-sized stocks, which in turn favored banking stocks as this enhances banks’ credit quality. If markets remain steady ahead, bank stocks might stage a rebound on higher yields. However, it is still too early to be fully bullish on bank stocks as some banks are “still seeing a flurry of defaults”, per a CNBC article.
SPDR SP Retail ETF (XRT - Free Report) – Up 17.9% Past Month
The consumer sector looks to be on the mend. Visa's total U.S. payment volume returned to positive annual growth in June and from July 1-21 thanks to strong positive growth from debit and card-not-present (CNP) payment volumes, as well as improving performances from its credit card and card-present businesses. The Present Situation Index of the consumer confidence is also hopeful (read: Can the Best Sector & Its ETFs of July Thrive in August Too?).
Industrial Select Sector SPDR ETF (XLI - Free Report) – Up 15.2% Past Month
The sector has suffered massively amid pandemic. With millions of Americans still unemployed, creation of blue-collar jobs would be of high priority. The latest recruitment pattern in the sector also calls for optimism.
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ETF Laggards are Emerging Leaders: Here's Why
U.S. stocks have been steady, of late, with investors shifting focus to the reopening of economy and an improvement in virus cases.Recent data points show that the outbreak is gradually coming under control, even in the hardest-hit states.
Virus-related hospitalizations in Texas dropped to the lowest level on Aug 12 since early July, and hospitalizations in California also displayed a downtrend, with Governor Gavin Newsom suggesting that the state was “turning the corner” on the pandemic, as quoted on Yahoo Finance.
The U.S. weekly jobless claims dropped to 963,000, marking the first time below 1 million since mid-March. The data also came in better than the Wall Street estimate of 1.1 million. Plus, the U.S. economy added 1.76 million jobs in July. The reading beat market expectations of a 1.6-million increase.Average hourly earnings for all employees on private non-farm payrolls went up 7 cents to $29.39.
The U.S. ISM Manufacturing PMI came in at 54.2 for July 2020, up from the 52.6 recorded in the previous month and surpassing market expectations of 53.6. That is the highest reading since March 2019, as manufacturing activity is recovering after the disturbance caused by the pandemic. U.S. manufacturers expanded in July for the third successive month.
In addition, developments in the treatment and vaccine phases have been encouraging. President Trump announced that the U.S. government will buy 100 million doses of its coronavirus vaccine from Moderna. Moreover, vaccine candidates from Pfizer, Johnson & Johnson and Astrazeneca are showing hopes.
Though complete normalcy is not possible right now, investors look hopeful about market recovery. Some laggards amid the peak of the pandemic are emerging as leaders. Below we highlight some of the ETFs. All these ETFs beat the S&P 500 in the past month (up 6.2%).
U.S. Global Jets ETF (JETS - Free Report) – Up 9.1% Past Month
Airline stocks bounced back strongly this week on a rebound in travel demand. This is especially true as the number of people going through airport security screening checkpoints hit a five-month high last weekend. Uptick in consumer confidence and some federal aid have been aiding airlines ETF (read: Airline ETF Takes Off: Will The Surge Continue?).
VanEck Vectors Gaming ETF (BJK - Free Report) – Up 14.1% Past Month
The MVIS Global Gaming Index tracks the overall performance of companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. One of the components of the fund — MGM Resorts (MGM) — jumped after Barry Diller’s IAC/InterActiveCorp. (IAC) bought a 12% equity stake in the casino company. The bet was mainly to cash in on the recent rise in online gambling.
First Trust NASDAQ Global Auto ETF (CARZ - Free Report) – Up 10.9% Past Month
The fund is a clear beneficiary of the Tesla rally. The electric carmaker’s shares soared after it announced a 5-for-1 stock split. Moreover, U.S. sales of new light vehicles in July rose 14% sequentially but were down 11% year on year (read: the electric carmaker raised optimism by announcing a 5-for-1 stock split).
SPDR SP Bank ETF (KBE - Free Report) – Up 16.2% Past Month
Talks of reopening the economy and government stimulus have reduced the delinquency risks for pint-sized stocks, which in turn favored banking stocks as this enhances banks’ credit quality. If markets remain steady ahead, bank stocks might stage a rebound on higher yields. However, it is still too early to be fully bullish on bank stocks as some banks are “still seeing a flurry of defaults”, per a CNBC article.
SPDR SP Retail ETF (XRT - Free Report) – Up 17.9% Past Month
The consumer sector looks to be on the mend. Visa's total U.S. payment volume returned to positive annual growth in June and from July 1-21 thanks to strong positive growth from debit and card-not-present (CNP) payment volumes, as well as improving performances from its credit card and card-present businesses. The Present Situation Index of the consumer confidence is also hopeful (read: Can the Best Sector & Its ETFs of July Thrive in August Too?).
Industrial Select Sector SPDR ETF (XLI - Free Report) – Up 15.2% Past Month
The sector has suffered massively amid pandemic. With millions of Americans still unemployed, creation of blue-collar jobs would be of high priority. The latest recruitment pattern in the sector also calls for optimism.
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 >>