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The tech-heavy Nasdaq Composite Index logged in the worst month since 2008, having fallen 15%. The decline came on the back of a technology rout, which wiped out more than $1.8 trillion in value from the tech stocks in April alone.
Invesco QQQ (QQQ - Free Report) , which serves as a proxy to the index, plunged 8.7% last month.Though most of the stocks in QQQ’s portfolio declined, a few survived the turmoil. These include The Kraft Heinz Company (KHC - Free Report) , Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , Constellation Energy Corporation (CEG - Free Report) , Ross Stores Inc. (ROSS - Free Report) and Monster Beverage Corporation (MNST - Free Report) .
Tech stocks saw the worst start to the year in two decades on Fed policy tightening. The central bank is expected to follow a more aggressive path in raising rates to fight the 40-year high inflation after raising rates by 25 bps in the latest FOMC meeting. Speaking at a panel hosted by the International Monetary Fund on Apr 21, Jerome Powell signaled a half percentage point rate increase at its May meeting and indicated similar rate rises after that to lower inflation. With inflation running roughly three times the Fed's 2% target,"it is appropriate to be moving a little more quickly," Powell said (read: ETF Areas to Consider as Fed Remains Super Hawkish).
As the Fed is planning to raise interest rates faster to control inflation, traders are less willing to pay the lofty prices they had been paying for tech giants. Higher rates are especially negative for technology stocks that are valued on future growth expectations. Additionally, the ongoing Russia-Ukraine war and the strict lockdown measures in China to fight COVID-19 have sparked worries over global economic expansion that continued to weigh on investors’ sentiment.
Let’s take a closer look at the fundamentals of QQQ.
QQQ in Focus
Invesco QQQ provides exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 50.4% of the assets, while communication services and consumer discretionary make up for a 16.4% and 16.1% share, respectively.
Invesco QQQ is one of the largest and most-popular ETFs in the large-cap space, with AUM of $171 billion and an average daily volume of around 69 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Should You Short Nasdaq ETFs as Index Hits New Low for 2022?).
Below we have highlighted the above-mentioned five stocks in the ETF with their respective positions in the fund’s basket.
Top-Performing Stocks in QQQ
Kraft Heinz is one of the largest consumer packaged food and beverage companies in North America. It manufactures and markets food and beverage products like condiments and sauces, cheese as well as dairy, meals, meats, refreshment beverages, coffee, and other grocery products.
KHC rose 8.3% in April and its earnings are expected to decline 8.2% this year. The stock makes up for 0.4% of assets in QQQ and has a Zacks Rank #3 (Hold). Kraft Heinz has a VGM Score of B.
Vertex Pharmaceuticals is focused on the discovery, development and commercialization of small-molecule drugs, targeting serious diseases. The stock climbed nearly 6% in a month and accounts for 0.6% in the fund’s basket.
Vertex Pharmaceuticals has an expected earnings growth rate of 11.8% for this year. It has a Zacks Rank #2 (Buy).
Constellation Energy generates and sells electricity in the United States. The stock makes up for 0.2% assets in the QQQ portfolio.
Constellation Energy gained 5.1% last month. It saw positive earnings estimate revision of 12 cents over the month for this year. Constellation Energy has a Zacks Rank #3 (Hold) and VGM Score of A.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States. This stock was up 4.4% last month and its earnings are expected to increase a modest 3.9% for the fiscal year (ending January 2023).
Ross Stores accounts for 0.3% share in QQQ and has a Zacks ETF Rank of 3. It has a Momentum Score of A.
Monster Beverage is a marketer and distributor of energy drinks and alternative beverages. It gained 3.7% in April and accounts for 0.38% in the fund’s basket (read: Food ETFs Getting Investors' Love Amid Shortage).
Monster Beverage Corporation is expected to see earnings growth of 9% for this year and has a Zacks Rank #4 (Sell).
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5 Best Stocks in Nasdaq ETF That Gained in April
The tech-heavy Nasdaq Composite Index logged in the worst month since 2008, having fallen 15%. The decline came on the back of a technology rout, which wiped out more than $1.8 trillion in value from the tech stocks in April alone.
Invesco QQQ (QQQ - Free Report) , which serves as a proxy to the index, plunged 8.7% last month.Though most of the stocks in QQQ’s portfolio declined, a few survived the turmoil. These include The Kraft Heinz Company (KHC - Free Report) , Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , Constellation Energy Corporation (CEG - Free Report) , Ross Stores Inc. (ROSS - Free Report) and Monster Beverage Corporation (MNST - Free Report) .
Tech stocks saw the worst start to the year in two decades on Fed policy tightening. The central bank is expected to follow a more aggressive path in raising rates to fight the 40-year high inflation after raising rates by 25 bps in the latest FOMC meeting. Speaking at a panel hosted by the International Monetary Fund on Apr 21, Jerome Powell signaled a half percentage point rate increase at its May meeting and indicated similar rate rises after that to lower inflation. With inflation running roughly three times the Fed's 2% target,"it is appropriate to be moving a little more quickly," Powell said (read: ETF Areas to Consider as Fed Remains Super Hawkish).
As the Fed is planning to raise interest rates faster to control inflation, traders are less willing to pay the lofty prices they had been paying for tech giants. Higher rates are especially negative for technology stocks that are valued on future growth expectations. Additionally, the ongoing Russia-Ukraine war and the strict lockdown measures in China to fight COVID-19 have sparked worries over global economic expansion that continued to weigh on investors’ sentiment.
Let’s take a closer look at the fundamentals of QQQ.
QQQ in Focus
Invesco QQQ provides exposure to the 102 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Information technology accounts for 50.4% of the assets, while communication services and consumer discretionary make up for a 16.4% and 16.1% share, respectively.
Invesco QQQ is one of the largest and most-popular ETFs in the large-cap space, with AUM of $171 billion and an average daily volume of around 69 million shares. Invesco QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Should You Short Nasdaq ETFs as Index Hits New Low for 2022?).
Below we have highlighted the above-mentioned five stocks in the ETF with their respective positions in the fund’s basket.
Top-Performing Stocks in QQQ
Kraft Heinz is one of the largest consumer packaged food and beverage companies in North America. It manufactures and markets food and beverage products like condiments and sauces, cheese as well as dairy, meals, meats, refreshment beverages, coffee, and other grocery products.
KHC rose 8.3% in April and its earnings are expected to decline 8.2% this year. The stock makes up for 0.4% of assets in QQQ and has a Zacks Rank #3 (Hold). Kraft Heinz has a VGM Score of B.
Vertex Pharmaceuticals is focused on the discovery, development and commercialization of small-molecule drugs, targeting serious diseases. The stock climbed nearly 6% in a month and accounts for 0.6% in the fund’s basket.
Vertex Pharmaceuticals has an expected earnings growth rate of 11.8% for this year. It has a Zacks Rank #2 (Buy).
Constellation Energy generates and sells electricity in the United States. The stock makes up for 0.2% assets in the QQQ portfolio.
Constellation Energy gained 5.1% last month. It saw positive earnings estimate revision of 12 cents over the month for this year. Constellation Energy has a Zacks Rank #3 (Hold) and VGM Score of A.
Ross Stores operates as an off-price retailer of apparel and home accessories, primarily in the United States. This stock was up 4.4% last month and its earnings are expected to increase a modest 3.9% for the fiscal year (ending January 2023).
Ross Stores accounts for 0.3% share in QQQ and has a Zacks ETF Rank of 3. It has a Momentum Score of A.
Monster Beverage is a marketer and distributor of energy drinks and alternative beverages. It gained 3.7% in April and accounts for 0.38% in the fund’s basket (read: Food ETFs Getting Investors' Love Amid Shortage).
Monster Beverage Corporation is expected to see earnings growth of 9% for this year and has a Zacks Rank #4 (Sell).