Investors have continued to show optimism despite a disappointing April jobs report. According to the Labor Department, nonfarm payrolls rose by only 266,000 last month. The metric lags the Dow Jones estimate of 1 million, per a CNBC article. The metric also missed the downwardly revised figure of a rise to 770,000 in March from the previously stated number of 916,000. Moving on, the U.S. unemployment rate came in at 6.1% during April, in comparison with the Dow Jones estimates of 5.8%, per the same CNBC article.
It is worth noting here that expectations of a continued dovish stance to be maintained by the Fed along with the bond-purchasing program kept investors upbeat, according to the verified sources. In this regard, Adam Crisafulli, founder of Vital Knowledge said that “the Fed will feel some vindication in their hesitancy to embrace tapering,” per the CNBC article. Consequently, the S&P 500 rose 0.7% touching a record high level on May 7. Moreover, the Dow Jones Industrial Average was also up 0.7% on the same day.
Furthermore, the streak of bullish U.S. economic data is keeping investors optimistic. The U.S. economy grew an annualized 6.4% in the first quarter of 2021, breezing past expectations of 6.1% following a 4.3% uptick in the previous three-month period. Apart from the reopening-driven third-quarter jump last year, the latest reading marked the best period for GDP since the third quarter of 2003.
The most recent U.S. consumer confidence data looks encouraging as the metric rose for the second consecutive month in April. Markedly, the metric hit a one-year high in March. The Conference Board's measure of consumer confidence index stands at 121.7 for April, comparing favorably with March’s revised reading of 109. Moreover, April’s reading beat the consensus estimate of 113, per a Reuters’ poll. Notably, the metric stands at the highest level since last February when the index was at 132.6.
The world’s largest economy is seeing a decline in the number of new coronavirus infection cases now. A large COVID-19 vaccination drive buoyed hopes of a faster U.S. economic recovery and the restoration of non-essential businesses to normalcy. Strengthening the optimism, the United States administered around 200 million doses of vaccines under 100 days of Biden administration, per a CNN report. According to the U.S. Centers for Disease Control and Prevention (CDC), more than half of American adults received at least one vaccine dose, per a Reuters article.
Markedly, several factors like earnings growth rate, profit margin stability, the future course of the Biden legislative strategies like American Jobs Plan and the American Families Plan, the Fed’s trimming of its $120 billion-a-month bond buying program and rate hikes as well as the continued economic resurgence are believed to drive the stock market in the coming months (according to
a CNBC article).
However, investors may have to worry about certain factors like increasing inflation levels, tension surrounding the Fed’s chances of cutting down on the monetary stimulus earlier than expected and the brewing possibilities of a tax hike in the coming months, per a CNBC article.
Against this backdrop, here are some top-ranked ETFs that investors can bet on:
The Industrial Select Sector SPDR Fund ( XLI Quick Quote XLI - Free Report)
The fund seeks to provide investment results that before expenses, correspond generally to the price and yield performance of the Industrial Select Sector Index. It seeks to provide precise exposure to companies in the following industries: aerospace and defense; industrial conglomerates; marine; transportation infrastructure; machinery; road and rail; air freight and logistics; commercial services and supplies; professional services; electrical equipment; construction and engineering; trading companies and distributors; airlines and building products. The fund has an AUM of $21.06 billion with an expense ratio of 12 basis points (bps). It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read:
Winning Sector ETFs on Biden's First 100 Days of Ruling). Invesco Dynamic Large Cap Growth ETF ( PWB Quick Quote PWB - Free Report)
The fund is based on the Dynamic Large Cap Growth Intellidex Index. Investors seeking to capitalize on the strong trends should consider growth ETFs. However, it is worth noting that these funds offer exposure to stocks with growth characteristics that have comparatively higher P/B, P/S and P/E ratios and exhibit a higher degree of volatility when compared to value stocks. It has an AUM of $735.8 million with an expense ratio of 56 bps. It has a Zacks ETF Rank #1 with a Medium risk outlook (read:
Growth ETFs to Gain From US Market Optimism in April). Invesco Dynamic Semiconductors ETF ( PSI Quick Quote PSI - Free Report)
The semiconductor market is experiencing expanding demand with increasing digitization and growing dependency on the Internet owing to some new normal trends like online shopping, work from home, digital payments, digitization of healthcare, growing favor for video gaming and many more.
The fund is based on the Dynamic Semiconductor Intellidex Index. It provides exposure to companies that are principally engaged in the manufacture of semiconductors. It has an AUM of $607.2 million with an expense ratio of 57 bps. It has a Zacks ETF Rank #1 with a High risk outlook (read:
Here's Why Semiconductor ETFs Are Looking Attractive for Q2). iShares U.S. Technology ETF ( IYW Quick Quote IYW - Free Report)
The fund seeks to track the investment results of an index composed of U.S. equities in the technology sector. Notably, technology ETFs should be given a place in any long-term focused portfolio as they have high-growth potential and would continue thriving in the coming years. IYW has an AUM of $7.03 billion with an expense ratio of 43 bps. It has a Zacks ETF Rank #1 with a Medium risk outlook (read:
Best ETFs to Invest in Big Tech). Fidelity MSCI Consumer Discretionary Index ETF ( FDIS Quick Quote FDIS - Free Report)
The increase in direct payments to Americans comes as a ray of hope for players in the consumer discretionary sector, which attracts a major portion of consumer spending. The fund intends to provide investment results that before expenses correspond generally with the price and yield performance of the MSCI USA IMI Consumer Discretionary Index. It has an AUM of $1.65 billion with an expense ratio of 8 bps. It has a Zacks ETF Rank #2 with a Medium risk outlook (read:
ETFs to Play the Reopening US Economy Optimism). Want key ETF info delivered straight to your inbox?
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