Wall Street registered a decline last week with the S&P 500 (down 2.21%), the Dow Jones (down 1.3%), the Nasdaq (down 4.1%) and the Russell 2000 (down 2.2%) all losing in the 2% to 4% range. The S&P 500 concluded the worst first half since 1970 last week.
S&P Global's final manufacturing purchasing managers' index (PMI) for June was revised up to 52.7, which was still the
lowest since July 2020, but better than the 52.4 previously reported for the month. However, the Institute for Supply Management's manufacturing index dipped more than expected to 53.0 for June from 56.1 in May, as an index tracking new orders contracted for the first time in two years.
In fact, not only last week, the entire June was lackluster. The sell-off in the S&P 500 Index aggravated when the Fed raised interest rates by 75 bps in its latest FOMC meeting — the biggest increase since 1994 — and signaled continued tightening ahead, which could further weigh on risk-on trade sentiments.
The strength in the greenback was palpable.
Invesco DB US Dollar Index Bullish Fund ( UUP Quick Quote UUP - Free Report) was up 1.2% last week. The U.S. yield curve again inverted in June after April, giving cues of a likelihood of a recession.
Most investment banks are warning about an impending recession. Deloitte sees about a 15% chance of a U.S. economic recession, as quoted on a New York Times article. Morgan Stanley sees the probability of a recession in the next 12 months at about 30%, according to the bank’s models (read:
5 Winning ETF Areas of a Lackluster June).
Goldman Sachs David Mericle and Ronnie Walker put the odds of a recession in the next year at 30%, up from 15% before. JPMorgan Chase economists raised their expected probability of a recession in the next one year to 35%. So, talks of a U.S. recession will be high in Q3.
Against this backdrop, below we highlight a few best-performing regular ETFs of last week.
ETFs in Focus Decline of The Retail Store ETF ( EMTY Quick Quote EMTY - Free Report) – Up 7.2%
The underlying Solactive-ProShares Bricks and Mortar Retail Store Index is the first comprehensive, public securities index composed solely of traditional retailers, and is positioned to potentially become an industry standard for measuring the health of bricks and mortar retailers. The fund charges 65 bps in fees.
Active Bear ETF HDGE – Up 5.6%
This ETF is active and does not track a benchmark. The AdvisorShares Ranger Equity Bear ETF seeks capital appreciation through short sales of domestically traded equity securities. The fund is pricey, charging 5.20% in annual fees (read:
5 ETFs That Gained Double Digits in Q2). US Anti-Beta Fund Mkt Neutral Quantshares ( BTAL Quick Quote BTAL - Free Report) – Up 5.1%
The Dow Jones U.S. Thematic Market Neutral Anti-Beta Index is a long / short market neutral index that is dollar-neutral. The fund’s expense ratio is 2.53%.
DB US Dollar Index Bullish Fund Invesco ( UUP Quick Quote UUP - Free Report) – Up 1%
The underlying Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange. The fund charges 78 bps in fees.