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Wall Street's Best Week Since Nov 2020: 5 Best ETF Areas

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Wall Street ended its seven-week losing streak last week. The S&P 500 recorded its best week since November 2020. The S&P 500 was up 6.6% last week while the Nasdaq Composite was off 6.8%. The Dow Jones Industrial Average Index, which saw its first eight-week losing streak since 1923 in the week ending May 20, advanced 6.2% last week. Small-cap index Russell 2000 gained 6.9%.

Earnings results from several retailers also rekindled bullishness among investors. Macy’s (M - Free Report) shares were up 19.3% on May 26 on the lifted guidance for the 2022 profit levels. Dollar Tree (DLTR - Free Report) also rose 21.9% on an earnings beat. Another dollar store Dollar General (DG - Free Report) also gained 17.5% last week following consumers’ inclination for shopping at dollar stores amid high inflation. Retailer Nordstrom (JWN - Free Report) jumped 24% last week due to an earnings beat.

Airlines including JetBlue (JBLU - Free Report) and Southwest (LUV - Free Report) upped their sales guidance for the current quarter, suggesting upbeat demand discretionary travel. The Memorial Day weekend and the related uptick in discretionary spending also contributed to the market rally last week.

Adding to the upbeat scenario is the decline in the initial jobless claims for the week ended May 21. The same came in at 210,000, declining from the previous week’s reading of 218,000, per a CNBC article. Also, certain U.S. economic data releases have been encouraging so far.

The Federal Reserve reported that industrial production increased 1.1% last month, well above the consensus estimate of 0.5%. Headline personal consumption expenditures (PCE) increased 6.3% in April over last year compared to March's 6.6% increase, and core PCE rose by 4.9% compared with 5.2% in the prior month.

Quincy Krosby, chief equity strategist for LPL Financial, believes that U.S. consumer spending is relatively strong. In this regard, she mentioned that the data releases last week “suggest the economy is slowing, and the Fed appears poised to raise rates at a 50 basic point clip over the next two months. But the notion that the consumer, 70 percent of the U.S. economy, is on a spending strike, is overblown as earnings reports coupled with positive guidance indicate otherwise”, as stated in a CNBC article.

Against this backdrop, below we highlight a few ETF areas that topped the list last week.

Energy

S&P Oil & Gas Exploration Bull 3X Direxion (GUSH - Free Report) – Up 30.9%

Microsectors Oil & Gas Exp. & Prod. 3X Leveraged (OILU) – Up 29.3%

Natural Gas ETF First Trust (FCG - Free Report) – Up 15.8%

US Natural Gas Fund (UNG - Free Report) – Up 6.7%

Shipping

Sonicshares Global Shipping ETF (BOAT - Free Report) – Up 7.1%

Income

Global Beta ETF Trust Global Income ETF (GBDV - Free Report) – Up 5.3%

Carbon Allowance

Kraneshares California Carbon Allowance ETF KCCA – Up 5.2%

Commodity

Optimum Yield Diversified Commodity Strategy (PDBC - Free Report) – Up 3.8%

Commodities Select Strategy iShares ETF (COMT) – Up 3.6%