Last week for Wall Street was all about vaccine optimism marred somewhat by rising virus cases and fears of further lockdowns. As a result, the S&P 500 and the Dow Jones indexes lost about 0.8% and 0.7%, respectively, while the tech-heavy the Nasdaq was up about 0.2%.
Pfizer Inc. ( PFE Quick Quote PFE - Free Report) and BioNTech SE ( BNTX Quick Quote BNTX - Free Report) came up with encouraging updates regarding their coronavirus vaccine candidate, BNT162b2, which reflects a vaccine efficacy rate of 95%. Before this, Moderna ( MRNA Quick Quote MRNA - Free Report) had also said that its vaccine was more than 94% effective in preventing the virus.
Apart from this, the global markets have been rejoicing in the possibility of a divided congress in the United States. A divided congress or balanced government means status quo. Some of Biden’s proposed policies (like tax hike) may not see an easy passage as chances of a balanced government are high.
Vaccine optimism (which indicates a sooner-than-expected return to economic normalcy) and a divided congress (which indicates the likely reiteration of the existing policy matters) mean a steady stock market. But steadily rising virus cases poured cold water on the great pharma breakthrough last week.
Against this backdrop, below we highlight a few ETFs that stood tall last week.
Invesco WilderHill Clean Energy ETF (– Up 11.95% PBW Quick Quote PBW - Free Report)
The underlying WilderHill Clean Energy Index is composed of stocks of companies that are publicly traded in the United States and engaged in the business of advancement of cleaner energy and conservation. Upbeat solar earnings and news of Tesla’s joining the S&P 500 probably benefited the fund last week.
Barclays Inverse U.S. Treasury Composite ETN – Up 11.69%
The underlying Barclays Inverse US Treasury Futures Composite Index employs a strategy that tracks the sum of the returns of periodically rebalanced short positions in equal face values of each of the 2-year, 5-year, 10-year, long-bond and ultra-long U.S. Treasury futures contracts. Expectations of a rising rate environment thanks to vaccine hopes probably gave a push to the product.
iShares U.S. Oil Equipment & Services ETF (– Up 11.06% IEZ Quick Quote IEZ - Free Report)
The underlying Dow Jones U.S. Select Oil Equipment & Service Index measures the performance of oil equipment & services sector of U.S. equity market by including companies that are suppliers of equipment or services to oil fields & offshore platforms, such as drilling, exploration, engineering, logistics, seismic information services & platform construction.
The energy sector suffered a lot as the pandemic drive the oil prices down massively. However, vaccine news bet big on the potential of a decent uptick in oil prices.
iShares Russell 1000 Pure U.S. Revenue ETF – Up 10.96%
The underlying Russell 1000 Pure Domestic Exposure Index reflects the performance of the common stock of companies that earn a higher percentage of their revenues through sales in the United States as compared to other large and mid-capitalization companies in the U.S. equity market.
This has been yet another beneficiary of vaccine news as small-cap stocks are more closely tied to the domestic economy and will gain if one of the hard-hit nations — the United States — gets rid of the virus gradually. Plus, hopes of further a fiscal package is also doing rounds in the United States, which has been a winning factor.
Pacer Cash Cows Fund of Funds ETF ( HERD Quick Quote HERD - Free Report) – Up 10.77%
The underlying Pacer Cash Cows Fund of Funds Index uses an objective, rules-based approach to construct a portfolio that is composed of the ETFs that seeks to provide exposure to companies with high free cash flow yields. While some high-beta quotient was prevalent in the market in the past two weeks, the pandemic is still in force, brightening the demand for cash.
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