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Top-Performing ETFs of Thanksgiving Week

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Wall Street remains typically upbeat in Thanksgiving week, marking the start of a year-end Santa rally. This year isn’t any different. Stocks offered moderate gains last week, with the S&P 500 adding 2%, the Dow Jones advancing about 2.4% and the Nasdaq inching up just 0.7%.  

Minutes from the FOMC's latest meeting showed that Federal Reserve officials expect to shift to smaller interest rate increases “soon,” as quoted on CNBC. Markets widely expect the rate-setting FOMC to settle for a 0.5 percentage point increase in December, following four successive 0.75 percentage point hikes.

Some committee members even expressed concerns about risks to the financial system if the Fed remains equally aggressive on policy tightening. Following such statements, interest rates went downhill last week, favoring the equity market rally.

Benchmark U.S. treasury yield started the week at 3.82%, while it ended the week at 3.68%. The two-year U.S. treasury yield slipped to 4.42% on Nov 25 from 4.51% on Nov 18. Markets expect a few more rate hikes in 2023, taking the funds rate to around 5%, per CNBC.

Meanwhile, retailers were splurging on early promotions and discounts as well as free shipping on online purchases to lure customers on Black Friday. According to the National Retail Federation (“NRF”), about 166.3 million Americans likely to shop either in-store or online during the Thanksgiving weekend (spanning five days from Thanksgiving Day through Cyber Monday).

The figure was up almost 8 million from last year and the highest since NRF began tracking this data in 2017. Of them, 32.9 million had planned to shop on Thanksgiving Day, 114.9 million on Black Friday, 60.4 million on Small Business Saturday, 31.4 million on Sunday and 63.9 million on Cyber Monday (read: 4 ETFs That Are the Best Deals on Black Friday Bonanza).

Against this backdrop, below, we highlight a few top-performing ETFs of last week.

ETFs in Focus

Credit Suisse S&P MLP Index ETN (MLPO - Free Report) – Up 90.9%

The underlying S&P MLP Index includes both master limited partnerships and publicly traded limited liability companies, which have a similar legal structure to MLPs and share the same tax benefits as MLPs. The note charges 95 bps in fees.

Turkey iShares MSCI ETF (TUR - Free Report) – Up 12.5%

The Borsa Istanbul 100 Index has been hovering around a record high as investors continue to use equities as a hedge for surging prices and a falling lira. The central bank has been slashing rates massively, adding to the 850 bps reduction of the key rate since September 2021, per tradingeconomics. This has bolstered the equity market.

US Natural Gas Fund (UNG - Free Report) – Up 10.2%

U.S. natural gas futures jumped to above $7.2/MMBtu last week, approaching the 2-month high of $7.3, boosted by concerns of potential coal supply disruptions. Uncertainty over the supply and demand of natural gas over the coming months prevailed as investors kept track of cold weather and news regarding the restart of the Freeport LNG export terminal.

Kraneshares European Carbon Allowance ETF (KEUA - Free Report) – Up 8.9%

Corporations and countries alike have recently joined in a climate initiative to shift to a decarbonized economy, helped by governments and demand from environmentally conscious consumers.

In addition to investing in renewable energies and carbon capture technologies, some companies use carbon offsets. Another way for companies to manage their carbon footprint is to buy and sell emission allowances. In the cap-and-trade system, a government sets a limit on overall emissions, which is tightened over time. Big carbon emitters need to buy these pollution permits to stay under regularity caps.

Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 8.8%

The Baltic Exchange’s dry bulk sea freight index hit a one-week high last week, driven by stronger demand across vessels segments. This has probably boosted the fund, which tracks the Capesize 5TC Index, Panamax 4TC Index & Supramax 6TC Index measure rates for shipping dry bulk freight.

Alps ETF Trust Sprott Junior Gold (SGDJ - Free Report) – Up 6.2%

As the chances of steeper rate hikes fell, the greenback dropped last week. Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) dropped about 1.5% last week. As gold prices are inversely related to the greenback, gold bullion ETF GLD gained about 0.6%. This, in turn, boosted gold mining ETF as mining stocks often act as a leveraged play of the underlying metal.


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