Wall Street was mixed-to-downbeat last week. The S&P 500, the Dow Jones and the Nasdaq have lost about 1.8%, 1.0% and 2.2%, respectively, while the Russell 2000 was up 1.4%. A new 40-year high inflation reading and rising rate worries played spoilsport though investors digested the Fed’s signal of hike rates this year (probably the first one in March).
At the end of Feb 10, 2022, the yield on the benchmark 10-year Treasury note jumped to 2.03% from 1.81% at the start of the month. US 10-year yield topped 2% for first time since August 2019. As of Feb 10, 2022, CME’s FedWatch Tool said that there are 32.9% chances of 2022 closing out with 175-200 bps of rates while a 26.5% probability is there for the year to end at a rate of 200-225 bps (read:
ETFs to Play as U.S. Benchmark Treasury Yield Tops 2%).
Growing tensions between Russia and Ukraine also weighed on the global markets. Against this backdrop, below we highlight a few ETF areas that were up more-or-less 10% last week.
ETFs in Focus Shipping
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.
Breakwave Dry Bulk Shipping ETF ( BDRY Quick Quote BDRY - Free Report) – Up 13.9% Cannabis
Cannabis ETFs have made a solid comeback last week. The re-introduction and passing of the Secure and Fair Enforcement Banking Act in the House of Representatives and discussion around other cannabis-related bills have led to the jump, said AdvisorShares’ Dan Ahrens,
as quoted on CNBC. Part of the America Competes Act, the SAFE Banking Act would give cannabis companies access to financial institutions and capital markets, which is a plus for the sector. Canopy Growth’s ( CGC Quick Quote CGC - Free Report) upbeat earnings report is another winning factor that acted as a cornerstone for the entire industry. Canopy Growth Corporation last week came out with a quarterly loss (proforma) of $0.22 per share versus the Zacks Consensus Estimate of a loss of $0.23. This compared to loss of $0.98 per share a year ago. Its revenues of $111.84 million surpassed the Zacks Consensus Estimate by 1.12%. This compared to year-ago revenues of $117.05 million. Cannabis Growth ETF – Up 12.8% Global X Cannabis ETF ( POTX Quick Quote POTX - Free Report) – Up 12.6% Advisorshares Poseidon Dynamic Cannabis ETF – Up 10.9% Amplify Seymour Cannabis ETF ( CNBS Quick Quote CNBS - Free Report) – Up 10.7% Miners
Miners ranging from silver to gold have staged a rally last week, with silver showing more command. Volatile market has led to gains in the safe-haven metals like gold and silver. Plus, Silver is often considered as an industrial metal too. About 50% of the metal’s total demand comes from industrial applications, while 30% comes from jewelry/silverware/coins and medal manufacturers.
The industrial demand for silver is rising, especially on the green energy front. Silver is used in solar power and electric vehicle applications. Hence, growth in the global solar PV industry, a likely rebound in global computer shipments, as well as new sources of demand for sensors used in IoT are providing a boost to silver demand.
Purefunds ISE Junior Silver ETF ( SILJ Quick Quote SILJ - Free Report) – Up 10.9% S&P Metals & Mining SPDR ETF ( XME Quick Quote XME - Free Report) – Up 9.4% Global Silver Miners iShares MSCI ETF ( SLVP Quick Quote SLVP - Free Report) – Up 9.2% Global X Silver Miners ETF ( SIL Quick Quote SIL - Free Report) – Up 8.2%