After a volatile January, Wall Street started February on a strong footing.The S&P 500, the Dow Jones and the Nasdaq Composite added about 3%, 3.1% and 3.4%, respectively, past week (as of Feb 5, 2021). The S&P 500 and the Nasdaq Composite Index are hovering around new highs.
Solid corporate earnings and expectations of a fat stimulus by U.S. President Joe Biden’s administration have renewed the appeal for the riskier assets. The stronger-than-expected results so far in the fourth quarter have led analysts to raise their estimates for the coming quarters (read:
Ride Market Rally With High-Beta ETFs & Stocks).
Against this backdrop, below we highlight a few leveraged ETF areas that surged last week.
Marijuana stocks started February on a strong note. The latest surge came on the heels of the news that
three Democratic senators led by Majority Leader Chuck Schumer said they would make marijuana reform legislation a key consideration in the current Congress, boosting hopes for a federal legalization.
Also, the latest deal activity in the space has strengthened the bullish case for these stocks. This is especially true as Jazz Pharmaceuticals (JAZZ) agreed to buy cannabinoid drug company GW Pharmaceuticals (GWPH) for $7.2 billion in cash and stock.
Global X Cannabis ETF ( POTX Quick Quote POTX - Free Report) (up 26.6%), Spinnaker ETF Series The Cannabis ETF THCX) (up 25.2%), Amplify Seymour Cannabis ETF (CNBS) (up 24.7%) and Advisorshares Pure Cannabis ETF (YOLO) (up 23.6%) were the clear gainers of the above-mentioned moves (read: Top ETF Stories of January Worthy of Attention in February). Travel
Hopes of a sooner-than-expected global economic recovery amid vaccine launches and rollouts as well as a gradual return to normalcy have boosted travel stocks.
ETFMG Travel Tech ETF ( AWAY Quick Quote AWAY - Free Report) thus added about 15.8% (read: Leisure Stocks & ETFs Rally on Strong Vaccine Hopes). Mining Stocks
Uranium equities had a great week thanks to
positive business fundamentals. As quoted on the S&P Global Market Intelligence report, TD Securities analyst Greg Barnes wrote in a Feb 3 note “that a subreddit named r/UraniumSqueeze was created Feb 1 on the Reddit website amid a retail-driven rally in silver markets and had already accrued about 500 members. Users on the social media site called on other day-by-day investors to invest in the radioactive metal.” The very news probably boosted uranium prices and the mining companies’ ETF like Northshore Global Uranium Mining ETF ( URNM Quick Quote URNM - Free Report) , which is up 15.4% (see all Materials ETFs here). 3D Printing
3D Printing has been on a tear lately thanks to the growing transition to automation, smart technologies and decentralization of factories.
3D Printing ETF ( PRNT Quick Quote PRNT - Free Report) (up 14.9%) was a clear winner of this trend shift. Blockchain
Transformational Data Sharing Amplify ETF ( BLOK Quick Quote BLOK - Free Report) added about 14.7%. The fund is actively managed and seeks to provide total return by investing at least 80% of its net assets in the equity securities of companies actively involved in the development and utilization of transformational data sharing technologies.
In recent weeks, the fund has been a beneficiary of the bitcoin rally. Since “the
blockchain in Bitcoin literally acts a ledger; it keeps track of the balances for all users and updates them as money changes hands,” BLOK has every reason to gain traction. Biotech
The pandemic has also a triggered a race to introduce vaccine and treatment, thereby bolstering investing opportunities in the biotech sector.
Bioshares Biotech Clinical Trial BBC) (up 12.6%) was the prime winner of the rally (read: How Will Biotech ETFs React to Q4 Earnings?). 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>>