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Wall Street was downbeat last week mainly due to Federal Reserve Chair Jerome Powell’s comments at the Jackson Hole economic symposium that the central bank will remain committed to fight inflation. "Restoring price stability will likely require maintaining a restrictive policy stance for some time," Powell said in his remarks at the gathering in Wyoming, as quoted on Yahoo Finance. This has resulted in rising rate worries.
The Nasdaq led losses on Friday, declining 3.9%, and the S&P 500 dropped 3.3%, with both indexes posting their biggest one-day declines since June 13, per a Yahoo Finance article. The Dow Jones Industrial Average fell 3%. All three major averages dropped to four-week lows. Overall, the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell lost about 4%, 4.2%, 4.4% and 2.9%, respectively.
If this was not enough, on Wednesday, Federal Reserve Bank of Kansas City President Esther George told Yahoo Finance that policymakers have “more work to do” on interest rate hikes, and the steepest impacts from its recent moves have not yet been felt, the article revealed. The Fed will likely hike rates by 50 basis points in September amid higher inflation and growing recession worries, according to economists in a Reuters poll (read: Summer Rally Ended? Inverse ETFs to Tap).
Last week, traders priced in around a 46.5% chance of a 75-basis-point rate hike in September and a 53.5% chance of a 50-bp increase following recent hawkish remarks from Fed officials.The dollar jumped to a more than one-month high against its rivals.
Among other key data points, on Friday, data from the Bureau of Economic Analysis revealed consumer prices dropped slightly last month. Headline PCE fell 0.1% between June and July with a 4.8% decline in energy prices driving the index lower. On a year-over-year basis, headline PCE rose 6.3% in July.
Core PCE, the Fed's preferred measure of inflation, increased 0.1% sequentially in July and 4.6% from the prior year, marking the lowest annual increase since October 2021. Economists had expected core PCE would gain 4.7% against the same month last year.
Meanwhile, oil and gas prices staged ascent. The energy sector rallied driven by a rise in oil price on hopes of OPEC output cuts and a drop in inventory. United States Oil Fund, LP (USO - Free Report) was up 1.6% last week. Earnings season remained more-or-less decent, but retailers’ earnings disappointed.
Against this backdrop, below we highlight a few winning ETFs of Last week.
ETFs in Focus
iPatha.B Energy Subindex TR ETN (JJE) – Up 17.6%
Oil prices jumped recently after Saudi indicated that OPEC could slash output. The Organization of the Petroleum Exporting Countries plans to lower production to correct the recent oil price decline driven by poor futures market liquidity and recessionary fears. The decision has been taken despite the fact that the oil market is extremely tight (read: Time for Oil & Gas ETFs for 2023?).
Sprott Uranium Miners ETF (URNM) – Up 13.3%
Share prices of uranium miners jumped last week as Japan's Prime Minister Fumio Kishida said the nation resume idled nuclear plants and focus on developing next-generation reactors to get prepared for the soaring energy costs amid the Ukraine crisis.
iPatha.B Coffee Subindex TR ETN – Up 11.8%
Dry weather in key producing region of Brazil led to gains in coffee prices. This has hurt the development of coffee buds.
Golden Dragon China Invesco ETF (PGJ - Free Report) – Up 10.1%
China’s equities gained on stimulus measures. China boosted its economic stimulus with a further one trillion yuan ($146 billion) of measures to promote growth and limit the fallout of Covid lockdowns and the debacle in the property market.
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Best-Performing ETF Areas of Last Week
Wall Street was downbeat last week mainly due to Federal Reserve Chair Jerome Powell’s comments at the Jackson Hole economic symposium that the central bank will remain committed to fight inflation. "Restoring price stability will likely require maintaining a restrictive policy stance for some time," Powell said in his remarks at the gathering in Wyoming, as quoted on Yahoo Finance. This has resulted in rising rate worries.
The Nasdaq led losses on Friday, declining 3.9%, and the S&P 500 dropped 3.3%, with both indexes posting their biggest one-day declines since June 13, per a Yahoo Finance article. The Dow Jones Industrial Average fell 3%. All three major averages dropped to four-week lows. Overall, the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell lost about 4%, 4.2%, 4.4% and 2.9%, respectively.
If this was not enough, on Wednesday, Federal Reserve Bank of Kansas City President Esther George told Yahoo Finance that policymakers have “more work to do” on interest rate hikes, and the steepest impacts from its recent moves have not yet been felt, the article revealed. The Fed will likely hike rates by 50 basis points in September amid higher inflation and growing recession worries, according to economists in a Reuters poll (read: Summer Rally Ended? Inverse ETFs to Tap).
Last week, traders priced in around a 46.5% chance of a 75-basis-point rate hike in September and a 53.5% chance of a 50-bp increase following recent hawkish remarks from Fed officials.The dollar jumped to a more than one-month high against its rivals.
Among other key data points, on Friday, data from the Bureau of Economic Analysis revealed consumer prices dropped slightly last month. Headline PCE fell 0.1% between June and July with a 4.8% decline in energy prices driving the index lower. On a year-over-year basis, headline PCE rose 6.3% in July.
Core PCE, the Fed's preferred measure of inflation, increased 0.1% sequentially in July and 4.6% from the prior year, marking the lowest annual increase since October 2021. Economists had expected core PCE would gain 4.7% against the same month last year.
Meanwhile, oil and gas prices staged ascent. The energy sector rallied driven by a rise in oil price on hopes of OPEC output cuts and a drop in inventory. United States Oil Fund, LP (USO - Free Report) was up 1.6% last week. Earnings season remained more-or-less decent, but retailers’ earnings disappointed.
Against this backdrop, below we highlight a few winning ETFs of Last week.
ETFs in Focus
iPatha.B Energy Subindex TR ETN (JJE) – Up 17.6%
Oil prices jumped recently after Saudi indicated that OPEC could slash output. The Organization of the Petroleum Exporting Countries plans to lower production to correct the recent oil price decline driven by poor futures market liquidity and recessionary fears. The decision has been taken despite the fact that the oil market is extremely tight (read: Time for Oil & Gas ETFs for 2023?).
Sprott Uranium Miners ETF (URNM) – Up 13.3%
Share prices of uranium miners jumped last week as Japan's Prime Minister Fumio Kishida said the nation resume idled nuclear plants and focus on developing next-generation reactors to get prepared for the soaring energy costs amid the Ukraine crisis.
iPatha.B Coffee Subindex TR ETN – Up 11.8%
Dry weather in key producing region of Brazil led to gains in coffee prices. This has hurt the development of coffee buds.
Golden Dragon China Invesco ETF (PGJ - Free Report) – Up 10.1%
China’s equities gained on stimulus measures. China boosted its economic stimulus with a further one trillion yuan ($146 billion) of measures to promote growth and limit the fallout of Covid lockdowns and the debacle in the property market.