We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ETFs to Gain as U.S. Business Activity Touches 18-Month High
Read MoreHide Full Article
A slew of positive economic data along with a slowdown in the new coronavirus cases is instilling optimism among investors. According to data firm IHS Markit, its preliminary composite purchasing managers index (PMI), which measures both manufacturing and service activities, surged to an 18-month high of 54.7 in August from 50.3 in July (per a Reuters Article). Notably, any reading above 50 indicates expansion. It has also been noted that the United States is seeing faster economic recovery in comparison to Japan, Australia and European nations, per a BloombergQuint article.
Commenting on the data, Sian Jones, an economist at IHS Markit said that, “August data pointed to a further improvement in business conditions across the private sector as client demand picked up among both manufacturers and service providers. Notably, the renewed increase in sales among service sector firms was welcome news following five months of declines,” according to a BloombergQuint article.
Data in Detail
Per a Dow Jones article, IHS Markit PMI for the manufacturing sector came in at 53.6 in August, up from July's 50.9, registering the fastest rate of improvement since January 2019. The metric compared favorably with economists’ expectations of a lower reading of 51.5. Meanwhile, the service activity index rose to 54.8 from 50.
Increase in sales among manufacturing and service sector firms was led by a sharp upturn in new export orders, the IHS Markit report added. In fact, the survey's flash composite new orders index rose to 54 in August (the highest since March 2019) from 49.7 in July, per a Reuters article. With global economies reopening, there was a strong rise in foreign sales as well.
Going on, factory activity expanded in August for the fourth month in a row. The flash manufacturing PMI rose to a 19-month high of 53.6 in August from 50.9 in July, per a Reuters article. Analysts, by the way, were expecting a reading of 51.9 in August. Strength in new orders and production supported the gains. Notably, a gauge of new orders received by factories rose to 54.3 from 51.3 in July, per a Reuters article.
Industrial ETFs to Gain
The U.S. economy has started to reopen in phases and there is massive Fed and government stimulus to combat the crisis which can help the economy rebound. The Federal Reserve officials currently hold the overnight borrowing rate at a range of 0-0.25% after the Jul 28-29 meeting.
Against this backdrop, investors can keep a tab of the following ETFs (see all industrial ETFs here):
The Industrial Select Sector SPDR Fund (XLI - Free Report)
Image: Bigstock
ETFs to Gain as U.S. Business Activity Touches 18-Month High
A slew of positive economic data along with a slowdown in the new coronavirus cases is instilling optimism among investors. According to data firm IHS Markit, its preliminary composite purchasing managers index (PMI), which measures both manufacturing and service activities, surged to an 18-month high of 54.7 in August from 50.3 in July (per a Reuters Article). Notably, any reading above 50 indicates expansion. It has also been noted that the United States is seeing faster economic recovery in comparison to Japan, Australia and European nations, per a BloombergQuint article.
Commenting on the data, Sian Jones, an economist at IHS Markit said that, “August data pointed to a further improvement in business conditions across the private sector as client demand picked up among both manufacturers and service providers. Notably, the renewed increase in sales among service sector firms was welcome news following five months of declines,” according to a BloombergQuint article.
Data in Detail
Per a Dow Jones article, IHS Markit PMI for the manufacturing sector came in at 53.6 in August, up from July's 50.9, registering the fastest rate of improvement since January 2019. The metric compared favorably with economists’ expectations of a lower reading of 51.5. Meanwhile, the service activity index rose to 54.8 from 50.
Increase in sales among manufacturing and service sector firms was led by a sharp upturn in new export orders, the IHS Markit report added. In fact, the survey's flash composite new orders index rose to 54 in August (the highest since March 2019) from 49.7 in July, per a Reuters article. With global economies reopening, there was a strong rise in foreign sales as well.
Going on, factory activity expanded in August for the fourth month in a row. The flash manufacturing PMI rose to a 19-month high of 53.6 in August from 50.9 in July, per a Reuters article. Analysts, by the way, were expecting a reading of 51.9 in August. Strength in new orders and production supported the gains. Notably, a gauge of new orders received by factories rose to 54.3 from 51.3 in July, per a Reuters article.
Industrial ETFs to Gain
The U.S. economy has started to reopen in phases and there is massive Fed and government stimulus to combat the crisis which can help the economy rebound. The Federal Reserve officials currently hold the overnight borrowing rate at a range of 0-0.25% after the Jul 28-29 meeting.
Against this backdrop, investors can keep a tab of the following ETFs (see all industrial ETFs here):
The Industrial Select Sector SPDR Fund (XLI - Free Report)
The fund tracks the Industrial Select Sector Index (read: Industrial ETFs Are Gaining Despite Mixed Q2 Earnings).
AUM: $11.0 billion
Expense Ratio: 0.13%
Vanguard Industrials ETF (VIS - Free Report)
The fund tracks the MSCI US Investable Market Industrials 25/50 index (read: Is Industrials Sector the New Rising Star? ETFs in Focus).
AUM: $3.08 billion
Expense Ratio: 0.10%
iShares U.S. Industrials ETF (IYJ - Free Report)
The fund tracks the Dow Jones U.S. Industrials Index (read: Impressed by Earnings Beat? Play These Sector ETFs).
AUM: $866.2 million
Expense Ratio: 0.42%
Fidelity MSCI Industrials Index ETF (FIDU - Free Report)
The fund tracks the MSCI USA IMI Industrials Index.
AUM: $387.3 million
Expense Ratio: 0.08%
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 >>