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Wall Street witnessed mixed trading last week. The S&P 500, the Dow Jones and the Nasdaq gained about 0.8%, 1.3% and 0.01%, respectively, while the Russell 2000 was off 1%. Rising rate worries played spoilsport though investors digested the Fed’s signal of hike rates this year (probably the first one in March). Hence, the indexes gained on Friday in response to upbeat U.S. GDP data.
The Fed meeting last week came across as hawkish. Federal Reserve policy makers indicated that they are likely to enact their first interest rate hike since 2018 in their March meeting to combat sky-high inflation. “With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the central bank said in a statement that concluded its two-day meeting this week (read: ETFs to Buy on Likely March Rate Hike With More in the Cards).
On a positive note, the U.S. economy grew an annualized 6.9% in the fourth quarter of 2021, breezing past expectations of 5.5%, following a 2.3% uptick in the previous three-month period. For full-year 2021, the economy advanced 5.7% (versus a 3.4% decline in Q4), the highest since 1984, per tradingeconomics.
Consumer spending, which accounts for more than two-thirds of U.S. GDP, rose 3.3% thanks to a 4.7% surge in services spending, namely health care, recreation and transportation. Fixed investment bounced back 1.3%, driven by intellectual property products (read: 2021 U.S. GDP Growth Best Since 1984: Industry ETFs to Win).
Against this backdrop, below we highlight a few ETFs that were up at least 3% last week.
ETFs in Focus
Palladium – Physical Palladium ETF (PALL - Free Report) – Up 12.7% Past Week
Worries surrounding inflation and escalating Russia-Ukraine tensions led to the gains in palladium. Russia is rich in palladium. Russia's Nornickel is the world's largest palladium producer. Palladium is used in pollution-reducing catalytic converters in gasoline engines. Investors should note that palladium jumped to see record-high sales in May 2021 before slumping and becoming the worst-performing major commodity of 2021. This has corrected the metal’s sky-high valuation. And now the metal has found a way to rally.
Shipping – Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 9.5% Past Week
The ongoing supply chain issues have kept the demand for shipping at pretty high levels, leading to higher freight rates. The rate for a single shipping container has shot up materially over the last few months as the pandemic disrupted supply chains and trade channels.
Natural Gas – iPath Series B Bloomberg Natural Gas Subindex Total Return ETN – Up 24.5% Past Week
Natural gas prices continued to trend higher as LNG flows hit a record. Traders in the Gulf were purchasing spot gas to use for LNG for the energy needs of the Europeans. The weather is expected to be much colder than normal in the South during the next 6-10 days, per fxempire.com. Over the next 8-14 days, the weather throughout most of the mid-West and East Coast are expected to be colder than normal. As a result, natural gas prices soared last week.
Oil – Vaneck Oil Services ETF (OIH - Free Report) – Up 6.5% Past Week
Oil prices jumped last week and hit a seven-year high lately. Oil staged six straight weeks of gains as geopolitical turmoil between Russia and Ukraine worsened concerns over tight energy supply. On a weekly basis, the benchmark Brent contracts logged their longest run of gains since October. Tight oil supplies pushed the six-month market structure for Brent into steep backwardation of $6.92 a barrel, the widest since 2013.
Soybean – Teucrium Soybean (SOYB - Free Report) – Up 3.4% Past Week
Soybean futures increased to above $14.5 per bushel, marking the strongest level since June thanks to a rise in the prices of crude oil and vegetable oils and the possibility of lower supply. Since November, most parts of Argentina's crop belt have been reeling under severe drought.
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5 Best ETF Areas of Last Week
Wall Street witnessed mixed trading last week. The S&P 500, the Dow Jones and the Nasdaq gained about 0.8%, 1.3% and 0.01%, respectively, while the Russell 2000 was off 1%. Rising rate worries played spoilsport though investors digested the Fed’s signal of hike rates this year (probably the first one in March). Hence, the indexes gained on Friday in response to upbeat U.S. GDP data.
The Fed meeting last week came across as hawkish. Federal Reserve policy makers indicated that they are likely to enact their first interest rate hike since 2018 in their March meeting to combat sky-high inflation. “With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the central bank said in a statement that concluded its two-day meeting this week (read: ETFs to Buy on Likely March Rate Hike With More in the Cards).
On a positive note, the U.S. economy grew an annualized 6.9% in the fourth quarter of 2021, breezing past expectations of 5.5%, following a 2.3% uptick in the previous three-month period. For full-year 2021, the economy advanced 5.7% (versus a 3.4% decline in Q4), the highest since 1984, per tradingeconomics.
Consumer spending, which accounts for more than two-thirds of U.S. GDP, rose 3.3% thanks to a 4.7% surge in services spending, namely health care, recreation and transportation. Fixed investment bounced back 1.3%, driven by intellectual property products (read: 2021 U.S. GDP Growth Best Since 1984: Industry ETFs to Win).
Against this backdrop, below we highlight a few ETFs that were up at least 3% last week.
ETFs in Focus
Palladium – Physical Palladium ETF (PALL - Free Report) – Up 12.7% Past Week
Worries surrounding inflation and escalating Russia-Ukraine tensions led to the gains in palladium. Russia is rich in palladium. Russia's Nornickel is the world's largest palladium producer. Palladium is used in pollution-reducing catalytic converters in gasoline engines. Investors should note that palladium jumped to see record-high sales in May 2021 before slumping and becoming the worst-performing major commodity of 2021. This has corrected the metal’s sky-high valuation. And now the metal has found a way to rally.
Shipping – Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 9.5% Past Week
The ongoing supply chain issues have kept the demand for shipping at pretty high levels, leading to higher freight rates. The rate for a single shipping container has shot up materially over the last few months as the pandemic disrupted supply chains and trade channels.
Natural Gas – iPath Series B Bloomberg Natural Gas Subindex Total Return ETN – Up 24.5% Past Week
Natural gas prices continued to trend higher as LNG flows hit a record. Traders in the Gulf were purchasing spot gas to use for LNG for the energy needs of the Europeans. The weather is expected to be much colder than normal in the South during the next 6-10 days, per fxempire.com. Over the next 8-14 days, the weather throughout most of the mid-West and East Coast are expected to be colder than normal. As a result, natural gas prices soared last week.
Oil – Vaneck Oil Services ETF (OIH - Free Report) – Up 6.5% Past Week
Oil prices jumped last week and hit a seven-year high lately. Oil staged six straight weeks of gains as geopolitical turmoil between Russia and Ukraine worsened concerns over tight energy supply. On a weekly basis, the benchmark Brent contracts logged their longest run of gains since October. Tight oil supplies pushed the six-month market structure for Brent into steep backwardation of $6.92 a barrel, the widest since 2013.
Soybean – Teucrium Soybean (SOYB - Free Report) – Up 3.4% Past Week
Soybean futures increased to above $14.5 per bushel, marking the strongest level since June thanks to a rise in the prices of crude oil and vegetable oils and the possibility of lower supply. Since November, most parts of Argentina's crop belt have been reeling under severe drought.