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Wall Street delivered a mixed performance last week with the S&P 500 (up 1.6%), the Nasdaq Composite (up 3.31%) and the Russell 2000 (up 3.88%) returning positively and the Dow Jones (down 0.15%) losing a little.
As expected, the Federal Reserve on Wednesday hiked its benchmark interest rate by 25 bps and gave an indication that more rate hikes are in the cards as inflation remains high. However, as inflation is showing signs of cooling, future rate hikes are likely to be smaller in magnitude. The latest hike takes rates to a target range of 4.5%-4.75%, the highest since October 2007. The move also marked the eighth increase in rates since March 2022.
The last week was marked with key tech earnings. Among these, Apple Inc. (AAPL - Free Report) reported dismal first-quarter fiscal 2023 results as it missed the Zacks Consensus Estimate for earnings for the first time since 2016. The tech giant posted its largest year-over-year quarterly revenue decline since 2019 (read: ETFs in Focus on Apple's First Earnings Miss Since 2016).
After the closing bell on Thursday, Amazon (AMZN - Free Report) disappointed investors following its fourth-quarter results. Though the e-commerce giant beat earnings and revenue estimates, it posted the least profitable holiday quarter since 2014 and the biggest-ever annual loss as a public company (read: ETFs in Focus Posts Amazon's Biggest Annual Loss Ever).
After the closing bell on Feb 1, Facebook’s parent company Meta Platforms (META - Free Report) reported solid fourth-quarter 2022 results, which outpaced revenue and earnings estimates. Though the social media giant reported its third consecutive quarterly drop in revenues, it provided an upbeat revenue forecast, signaling a rebound in demand for digital ads after months of weak sales.
In terms of economic data points, ISM manufacturing data came in weaker. The ISM Manufacturing PMI dropped to 47.4 in January, the lowest since May 2020 at the height of the covid pandemic and below market forecasts of 48. The reading pointed to the third successive contraction in factory activity as companies slowed outputs to better match demand in the first half of 2023 and prepare for growth in the second half of the year.
Against this backdrop, below we highlight a few ETF areas that won last week.
Cryptocurrency
First Trust Skybridge Crypto Industry and Digital Economy (CRPT - Free Report) – Up 8.6%
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) – Up 7.3%
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) – Up 8.3%
Tesla, which erased 65% of its value in 2022 for its worst year on record, rallied in recent days due to strong earnings. In 2022, the electric carmaker delivered a record 1.31 million electric vehicles, up 40% from 2021. It has ramped up production after opening new factories in Texas, Shanghai and Berlin. In any case, electric vehicle ETFs, in general, have been delivering upbeat performances this year.
Marijuana
AdvisorShares Pure U.S. Cannabis ETF (MSOS - Free Report) – Up 7.9%
ETFMG U.S. Alternative Harvest ETF (MJUS - Free Report) – Up 7.5%
Marijuana is a thriving industry in the United States. It is now legal in some way, shape or form in 47 states (plus Washington, D.C.), per a Forbes article. In Missouri, possession became legal on Dec. 8, 2022, but dispensaries aren’t expected to open until February 2023, the Forbes article elaborated. The regulatory backdrop holds the wild card for the industry’s well-being. President Biden’s era in the United States is thought to be speeding up the legalization of marijuana at the federal level.
Though U.S. retail sales for the month of December came in downbeat, a less-hawkish Fed and a decline in rates as well as energy prices this year went in favor of retail stocks and ETFs. This is because both factors are likely to boost consumers’ savings and their ability to shell out more on discretionary items.
Internet
Ark Next Generation Internet ETF (ARKW - Free Report) – Up 6.9%
Ark Investments’ ETFs have been offering blowout performances lately thanks to the uptake in its core holdings like Tesla, cryptocurrency and internet stocks. The comeback of technology shares in 2023 has been aiding Ark Investments’ ETFs like ARKW.
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Top-Performing ETF Areas of Last Week
Wall Street delivered a mixed performance last week with the S&P 500 (up 1.6%), the Nasdaq Composite (up 3.31%) and the Russell 2000 (up 3.88%) returning positively and the Dow Jones (down 0.15%) losing a little.
As expected, the Federal Reserve on Wednesday hiked its benchmark interest rate by 25 bps and gave an indication that more rate hikes are in the cards as inflation remains high. However, as inflation is showing signs of cooling, future rate hikes are likely to be smaller in magnitude. The latest hike takes rates to a target range of 4.5%-4.75%, the highest since October 2007. The move also marked the eighth increase in rates since March 2022.
The last week was marked with key tech earnings. Among these, Apple Inc. (AAPL - Free Report) reported dismal first-quarter fiscal 2023 results as it missed the Zacks Consensus Estimate for earnings for the first time since 2016. The tech giant posted its largest year-over-year quarterly revenue decline since 2019 (read: ETFs in Focus on Apple's First Earnings Miss Since 2016).
After the closing bell on Thursday, Amazon (AMZN - Free Report) disappointed investors following its fourth-quarter results. Though the e-commerce giant beat earnings and revenue estimates, it posted the least profitable holiday quarter since 2014 and the biggest-ever annual loss as a public company (read: ETFs in Focus Posts Amazon's Biggest Annual Loss Ever).
After the closing bell on Feb 1, Facebook’s parent company Meta Platforms (META - Free Report) reported solid fourth-quarter 2022 results, which outpaced revenue and earnings estimates. Though the social media giant reported its third consecutive quarterly drop in revenues, it provided an upbeat revenue forecast, signaling a rebound in demand for digital ads after months of weak sales.
In terms of economic data points, ISM manufacturing data came in weaker. The ISM Manufacturing PMI dropped to 47.4 in January, the lowest since May 2020 at the height of the covid pandemic and below market forecasts of 48. The reading pointed to the third successive contraction in factory activity as companies slowed outputs to better match demand in the first half of 2023 and prepare for growth in the second half of the year.
Against this backdrop, below we highlight a few ETF areas that won last week.
Cryptocurrency
First Trust Skybridge Crypto Industry and Digital Economy (CRPT - Free Report) – Up 8.6%
Bitwise Crypto Industry Innovators ETF (BITQ - Free Report) – Up 7.3%
Bitcoin prices jumped in recent weeks. A less-hawkish Fed has bolstered the risk-on trade sentiments and favored the beaten-down asset cryptocurrency this year (read: Cyptocurrency ETFs Won in Nasdaq's Best Week Since November).
Electric Vehicles
Simplify Volt Robocar Disruption and Tech ETF (VCAR - Free Report) – Up 8.3%
Tesla, which erased 65% of its value in 2022 for its worst year on record, rallied in recent days due to strong earnings. In 2022, the electric carmaker delivered a record 1.31 million electric vehicles, up 40% from 2021. It has ramped up production after opening new factories in Texas, Shanghai and Berlin. In any case, electric vehicle ETFs, in general, have been delivering upbeat performances this year.
Marijuana
AdvisorShares Pure U.S. Cannabis ETF (MSOS - Free Report) – Up 7.9%
ETFMG U.S. Alternative Harvest ETF (MJUS - Free Report) – Up 7.5%
Marijuana is a thriving industry in the United States. It is now legal in some way, shape or form in 47 states (plus Washington, D.C.), per a Forbes article. In Missouri, possession became legal on Dec. 8, 2022, but dispensaries aren’t expected to open until February 2023, the Forbes article elaborated. The regulatory backdrop holds the wild card for the industry’s well-being. President Biden’s era in the United States is thought to be speeding up the legalization of marijuana at the federal level.
Retail
S&P Retail SPDR (XRT - Free Report) – Up 7%
Though U.S. retail sales for the month of December came in downbeat, a less-hawkish Fed and a decline in rates as well as energy prices this year went in favor of retail stocks and ETFs. This is because both factors are likely to boost consumers’ savings and their ability to shell out more on discretionary items.
Internet
Ark Next Generation Internet ETF (ARKW - Free Report) – Up 6.9%
Ark Investments’ ETFs have been offering blowout performances lately thanks to the uptake in its core holdings like Tesla, cryptocurrency and internet stocks. The comeback of technology shares in 2023 has been aiding Ark Investments’ ETFs like ARKW.