After a dismal September, Wall Street gathered momentum with the three major indices climbing to the highest levels in five weeks. The gains were driven by revived stimulus hopes and improving economic data points.
Trump is supporting several independent coronavirus relief measures after calling-off fiscal package aid until after election. Trump has also called for stand-alone legislation to provide $25 billion to help the airline industry and $135 billion for additional Paycheck Protection Program loans to small businesses. He tweeted “If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now.” “The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business” (read: ETFs to Gain Despite Stalled Stimulus Talks). Additionally, the data on the new jobless benefit applications added to the strength. About 84,000 new claims were filed in the week ended Oct 3. Though it was above the consensus economist forecast of 820,000 claims, the figure is down about 9,000 from the previous week's level. Further, the rising prospect of Democratic candidate Joe Biden winning in the U.S. election is also driving the stocks higher. The new analysis by FiveThirtyEight revealed about 68% chance of the Democrats winning the Senate as well as holding the House of Representatives, raising the prospect of significant further stimulus early next year. As most corners of the market rallied on the slew of positive news, a few sectors scaled new highs. We have highlighted five ETFs from different sectors that hit all-time highs in the recent trading session: iShares U.S. Home Construction ETF ( ITB Quick Quote ITB - Free Report) – All-Time High Price: $59.18 The housing market has been booming given lower mortgage rates and higher demand for new homes. This is because record-low mortgage rates are encouraging people to buy more homes and have made refinance cheaper. While all the homebuilder ETFs are hitting new highs, ITB is the most-popular option in the homebuilding space with AUM of $2.4 billion and an average daily volume of 2.9 million shares. This fund provides exposure to U.S. companies that manufacture residential homes, charging investors 42 bps in annual fees and has a Zacks ETF Rank #3 (Hold) (read: 4 Top ETFs, Stocks From Attractive Sectors Pre Q3 Earnings). Virtus LifeSci Biotech Products ETF ( BBP Quick Quote BBP - Free Report) — All-Time High Price: $50.08 The biotech sector has been performing well driven by the progress in the development of a coronavirus vaccine or treatment, and waves of mergers and acquisitions. BBP follows the LifeSci Biotechnology Products Index, which measures the performance of biotechnology companies with at least one drug therapy approved by the FDA. Holding 47 stocks, the product has accumulated AUM of $26.2 million and charges 79 bps in fees per year. BBP trades in volume of 2,000 shares a day on average and has a Zacks ETF Rank #3 with a High risk outlook. SPDR S&P Semiconductor ETF ( XSD Quick Quote XSD - Free Report) – All-Time High Price: $135.16 Chip stocks have shown strong resilience amid the coronavirus pandemic on the stay-at-home trend, which has bolstered the demand for gaming chips and data center business. The rapid adoption of cloud, Internet of Things, autonomous cars, gaming, wearables, VR headsets, drones, virtual reality devices, artificial intelligence, cryptocurrencies, 5G and other advanced information technologies is fueling growth. This ETF tracks the S&P Semiconductor Select Industry Index, holding 37 stocks in its portfolio. It has amassed $529.1 million in its asset base while trades in average daily volume of about 60,000 shares. It charges 35 bps in fees per year and has a Zacks ETF Rank #2 (Buy) (read: 5 Reasons to Buy Semiconductor ETFs). Invesco DWA Industrials Momentum ETF ( PRN Quick Quote PRN - Free Report) – All-Time High Price: $81.46 Given that the stock valuation skyrocketed to lofty levels, investors are rushing to beaten-down cyclical sectors like industrials. Additionally, the sector is poised to gain irrespective of whoever (Biden or Trump) wins the election as both candidates plan to spur manufacturing and pursue large infrastructure packages. Notably, PRN is at the forefront of the sector’s strong momentum. This fund provides exposure to 38 industrial companies that are showing relative strength (momentum). It has accumulated $87.6 million in its asset base and charges 60 basis points in annual fees. It trades in average daily volume of 18,000 shares and has a Zacks ETF Rank #3 with a Medium risk outlook. SPDR S&P Retail ETF ( XRT Quick Quote XRT - Free Report) – All-Time High Price: $54.02 The retail industry is shining on a global digital shift that has led to soaring e-commerce sales. With AUM of $293.5 million, XRT tracks the S&P Retail Select Industry Index, holding 84 securities in its basket. The fund charges 35 bps in annual fees and trades in average daily volume of around 3.7 million shares. It has a Zacks ETF Rank #2 with a Medium risk outlook. Want key ETF info delivered straight to your inbox?
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