We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Russian Defense Ministry spokesman Igor Konashenkov has been quoted lately as saying Russia started returning some troops from the Ukraine border to bases. However, NATO chief Jens Stoltenberg said the military alliance had not seen “any signs of de-escalation on the ground from the Russian side,” as quoted on CNBC.
However, stocks started climbing on the sheer statement. U.S. 10-year Treasury yield crossed 2.03% as geopolitical tensions cooled and producer prices surged. The producer price index, which measures final-demand goods and services, rose 1% in January, against the Dow Jones estimate for 0.5%, per a CNBC article.
Over the last one year, the gauge jumped an unadjusted 9.7%, nearing a record in data going back to 2010. Barring food, energy and trade services, co-called core PPI rose 0.9% in January, well ahead of the 0.4% estimate.
To contain inflation, the Fed is prepared to tighten monetary policy after two years of unprecedented accommodation. The market is pricing in strong chances of a 1.75 percentage point rate increase by the end of 2022.
If the Russian tensions ease in the coming days, following ETFs are likely to gain/lose.
Dividend stocks often beat their non-dividend paying counterparts amid market uncertainty. Stocks with high dividend point to quality investing — a pre-requisite to making money in a volatile environment.The underlying FTSE High Dividend Yield Index of VYM consists of common stocks of companies paying out dividends that are generally higher than average. The Zacks Rank #1 (Strong Buy) VYM currently yields 2.80% annually. VYM charges 6 bps in fees.
Anemic growth in developed economies, QE scenario and muted bond yields have kept value investing subdued in the past decade. But things have been changing in 2022. With inflation hovering around a 40-year high level and the Fed expected to enact multiple rate hikes this year, bond yields are rising fast. And value stocks perform well in a rising rate environment. VTV yields 2.19% annually and charges 4 bps in fees. VTV has a Zacks Rank #1.
Gold had benefited lately as geopolitical tensions have rattled global markets and boosted a safe-haven rally. People view precious metals as a sign of wealth. Investing in precious metals like gold ensures safety of your money by not being reliant on a bank or business performance. However, if the geopolitical tensions ease and the rates rise, gold’s value will likely decline as the metal is a non-interets bearing asset.
The 10-year U.S. Treasury yield soared to its highest point in two years. Yields move inversely to prices. Hence, treasury bond ETFs are likely to underperform. TLT has a Zacks Rank #4 (Sell).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Russia-Ukraine Tensions Ease: ETFs to Win/Lose
Russian Defense Ministry spokesman Igor Konashenkov has been quoted lately as saying Russia started returning some troops from the Ukraine border to bases. However, NATO chief Jens Stoltenberg said the military alliance had not seen “any signs of de-escalation on the ground from the Russian side,” as quoted on CNBC.
However, stocks started climbing on the sheer statement. U.S. 10-year Treasury yield crossed 2.03% as geopolitical tensions cooled and producer prices surged. The producer price index, which measures final-demand goods and services, rose 1% in January, against the Dow Jones estimate for 0.5%, per a CNBC article.
Over the last one year, the gauge jumped an unadjusted 9.7%, nearing a record in data going back to 2010. Barring food, energy and trade services, co-called core PPI rose 0.9% in January, well ahead of the 0.4% estimate.
To contain inflation, the Fed is prepared to tighten monetary policy after two years of unprecedented accommodation. The market is pricing in strong chances of a 1.75 percentage point rate increase by the end of 2022.
If the Russian tensions ease in the coming days, following ETFs are likely to gain/lose.
ETFs to Gain
Vanguard High Dividend Yield ETF (VYM - Free Report)
Dividend stocks often beat their non-dividend paying counterparts amid market uncertainty. Stocks with high dividend point to quality investing — a pre-requisite to making money in a volatile environment.The underlying FTSE High Dividend Yield Index of VYM consists of common stocks of companies paying out dividends that are generally higher than average. The Zacks Rank #1 (Strong Buy) VYM currently yields 2.80% annually. VYM charges 6 bps in fees.
Vanguard Value ETF (VTV - Free Report)
Anemic growth in developed economies, QE scenario and muted bond yields have kept value investing subdued in the past decade. But things have been changing in 2022. With inflation hovering around a 40-year high level and the Fed expected to enact multiple rate hikes this year, bond yields are rising fast. And value stocks perform well in a rising rate environment. VTV yields 2.19% annually and charges 4 bps in fees. VTV has a Zacks Rank #1.
ETFs to Lose
SPDR Gold Shares GLD)
Gold had benefited lately as geopolitical tensions have rattled global markets and boosted a safe-haven rally. People view precious metals as a sign of wealth. Investing in precious metals like gold ensures safety of your money by not being reliant on a bank or business performance. However, if the geopolitical tensions ease and the rates rise, gold’s value will likely decline as the metal is a non-interets bearing asset.
iShares 20 Year Treasury Bond ETF (TLT - Free Report)
The 10-year U.S. Treasury yield soared to its highest point in two years. Yields move inversely to prices. Hence, treasury bond ETFs are likely to underperform. TLT has a Zacks Rank #4 (Sell).