Last week, Wall Street was upbeat. The S&P 500 (up 2.6%), the Dow Jones (up 1.3%) and the Nasdaq (up 3.3%) — the three key U.S. equity gauges gained by a decent measure. The S&P 500 has, in fact, entered a new bull market.
Fed & ECB Moves
Global markets saw the Fed turning hawkish despite the pause in rate hike last week. The U.S. central bank paused on its rate hike momentum while indicating more hikes for the future. The committee's dot plot revealed expectations of a funds rate of 5.6% by the end of 2023, implying that two more quarter-point rate hikes are likely before the year's end (read:
Quality ETFs to Shine as More Fed Hikes Loom Despite June Pause?).
The move was expected as U.S. consumer inflation took a dip to touch 4.0% in May 2023, marking the lowest since March 2021 and slightly below market expectations of 4.1%. This decline was primarily driven by a decrease in energy prices, predominantly gasoline and electricity (read:
7 ETF Areas to Tap 2-Year Low Inflation in May).
Meanwhile, the European Central Bank (ECB) announced on Thursday that it raised its main rate by 25 basis points to 3.5%. The decision marks a continuation of the rate-raising cycle initiated by the ECB in July 2022, aimed at curbing the record-high inflation rampant across the region (read:
ECB Hikes Rates to Highest in 22 Years: ETFs to Play). U.S. Retail Sales Beat Expectations
In May 2023, retail sales in the United States experienced an unexpected 0.3% month-over-month growth, surpassing predictions of a 0.1% decrease and continuing the upward trend from a 0.4% rise in April. These figures indicate that consumer spending remains strong and resilient.
Oracle (ORCL) became one of the top-performing stocks last week as the company reported solid fourth-quarter fiscal 2023 results, beating both revenue and earnings estimates. The software giant forecast an upbeat first quarter, driven by growing demand for its cloud offerings from companies deploying artificial intelligence (AI) (read:
Oracle Beats on Earnings in Q4, Shares Jump: ETFs to Tap). Cryptocurrencies Gain
Cryptocurrencies jumped to end the week as the world’s largest asset manager BlackRock’s plans to launch a bitcoin ETF. Investors should also note that, at the end of last week, the world's largest cryptocurrency exchange, Binance, managed to avoid a comprehensive asset freeze that the Securities and Exchange Commission (SEC) had requested. The court ordered Binance and its U.S. subsidiary to repatriate all of the country’s customer assets and facilitate withdrawals. This would ensure that Binance U.S. users can access their funds.
The SEC accused Binance and its CEO, Changpeng Zhao, of operating an unregistered securities exchange and brought out a lawsuit against them on Jun 5. The lawsuit alleges violations of securities laws, misleading investors, wash trading, and earning $11.6 billion in fees from unregistered business operations.
Against this backdrop, below we highlight a few winning ETFs of last week.
ETFs in Focus Teucrium Corn Fund ( CORN Quick Quote CORN - Free Report) ) – Up 11%
The CBOT Corn Futures Contract looks to reflect the daily changes of a weighted average of the closing prices for three futures contracts for corn that are traded on the CBOT. The expense ratio of 1.00%.
KraneShares Global Carbon Offset Strategy ETF ( KSET Quick Quote KSET - Free Report) ) – Up 10.3%
The KraneShares Global Carbon Offset Strategy ETF provides broad coverage of the voluntary carbon market by tracking carbon offset futures contracts. The fund charges 79 bps in fees.
Teucrium Soybean Fund ( SOYB Quick Quote SOYB - Free Report) ) – Up 9.8%
The underlying index looks to reflect the daily changes of a weighted average of the closing prices for three futures contracts for soybeans that are traded on the CBOT. The three contracts will be: 2nd-to-expire contract, 3rd-to-expire contract and the contract expiring in the November following the expiration month of the 3rd-to-expire contract. The fund charges 22 bps in fees.
KraneShares MSCI China Clean Technology Index ETF ( KGRN Quick Quote KGRN - Free Report) ) – Up 8.9%
The underlying MSCI China IMI Environment 10/40 Index aims to serve as a benchmark for investors seeking exposure to Chinese companies that focus on contributing to a more environmentally sustainable economy by making efficient use of scarce natural resources or by mitigating the impact of environmental degradation. The fund charges 78 bps in fees.
Global X MSCI China Information Technology ETF ( CHIK Quick Quote CHIK - Free Report) ) – Up 8.1%
The underlying MSCI China Information Technology 10/50 Index tracks the performance of companies in the information technology sector in the MSCI China Index. The fund charges 65 bps in fees.