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Top ETF Stories of November

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Wall Street was on a topsy-turvy ride in the month of November. While the start of the month was decent, a renewed virus scare and lockdowns weighed on the broader market at the end. Overall, the S&P 500, the Dow Jones, the Nasdaq and the Russell 2000 lost about 1.4%, 4.4%, 0.7% and 6.9% past month, respectively.

Nationwide COVID-19 lockdowns in Europe in late November once again stirred fears of further spread of infections. While this raised the chances of another wave of COVID-19 in other parts of the world, the finding of a new COVID-19 variant, namely Omicron, led to a massive crash in Wall Street in the month-end. 

Meanwhile, the Fed started QE tapering from November and corporate earnings came in upbeat. Holiday sales are forecast to be solid in 2021. Retail sales for the month of October was strong. Inflation data too was high due to supply chain issues. Oil prices staged a rally in November due to the prospect of higher demand but nosedived in the Thanksgiving week along with Wall Street on Omicron fears.

Against this backdrop, we highlight a few investing events that caught investors’ attention in November.

Finding of Omicron Strain in South Africa

The emergence of a new coronavirus strain, namely Omicron, was found to have a much bigger impact on Wall Street than anticipated. The World Health Organization called the new variant “highly transmissible.” The news of the spread of the variant caused a bloodbath on Wall Street on Black Friday. United States Oil Fund, LP (USO - Free Report) lost about 13% on Nov 26.

Powell to Speed Up Tapering

On Nov 30, Federal Reserve Chairman Jerome Powell said the central bank will discuss speeding up the tapering of bond-buying at its December meeting. Fed Chair Jay Powell also dropped the word “transitory” in describing inflation. These two factors are strong enough to weigh on the broader market. The benchmark U.S. treasury yield was 1.43% on Nov 30 versus 1.52% recorded the day before and the monthly high of 1.67% noted on Nov 23. iShares TIPS Bond ETF (TIP - Free Report) , the inflation-bating asset, was up 0.8% in November.

Agricultural ETFs Ripe With Profits

After a decade of underperformance, commodities are experiencing a huge rally this year thanks to optimism over global economic growth, reflation trade, widespread vaccination, chances of approval of more COVID-19 antiviral pills and supply chain disruptions. If this is not enough, several agricultural commodities specifically surged on weather concerns. iPatha.B Coffee Subindex TR ETN (JO) (up 13.6%), iPatha.B Softs Subindex TR ETN (JJS - Free Report) (up 5.9%) and Teucrium Wheat (WEAT - Free Report) (up 4.9%) are the gainers in the field (read: 4 Agriculture ETF Areas At a One-Year High: Here's Why).

Biotech Back in Fashion

iShares U.S. Pharmaceuticals ETF (IHE - Free Report) has about 20% exposure to Pfizer (PFE) and VanEck Biotech ETF (BBH - Free Report) has about 8.7% focus on Moderna (MRNA - Free Report) . Both companies are known for the success of the COVID-19 vaccine. With the spread of COVID-19 resuming all over again, all focus will now shift to vaccination and booster shots. Although Moderna shares surged on the Omicron news initially, shares slumped later on the Moderna CEO’s comment that the vaccine is less effective on new variant.

EV Space is All Charged-Up With IPO News

Rivian Automotive, the electric-vehicle company backed by Amazon.com Inc. (AMZN) (which has 20% stake in the automaker) and Ford Motor, went public on Nov 10, 2021, through a high-profile IPO. As many as 153 million shares were sold at an initial offering price of $78.00, valuing the company at $66.5 billion. Shares of RIVN saw an awesome spike on market debut.

Phoenix Motors filed for an initial public offering in the United States on Monday, becoming the latest EV maker looking to cash in on a growing investor appetite for eco-friendly automobiles, per Reuters. Though Tesla had a volatile ride in the month, tesla-heavy ETF Simplify Volt RoboCar Disruption and Tech ETF (VCAR - Free Report) was up 8% in November.

Tech & Semiconductor: Top Sector & Industry   

The technology sector was well-placed in November with semiconductor deserving a special mention.VanEck Semiconductor ETF (SMH) has advanced 22.1% past month. The semiconductor space has been on a tear as the pandemic has bolstered the demand for chips, leading to the worst global shortage in many years. Corporate earnings from the likes of Nvidia (NVDA), Qualcomm (QCOM) and Advanced Micro Devices (AMD) have been upbeat. The recent upsurge in the electric vehicle industry and increased awareness for clean energy have also made the semiconductor industry an investors’ darling.