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Wall Street delivered downbeat performances last week with the S&P 500 losing 2.3%, the Dow Jones retreating 1.1%, the Nasdaq Composite falling 2.9% and the Russell 2000 dropping 1.2% (read: Time for Value ETFs as Buffett Indicator Signals Caution?).
Notably, Rating agency Fitch downgraded the United States’ credit rating to AA+ from AAA last week, expecting fiscal deterioration over the next three years and repeated last minute debt ceiling negotiations that can pressurize the government’s ability to pay its bills.
Fitch initially raised concerns about a potential downgrade in May and continued to support that stance in June after the resolution of the debt ceiling crisis. The agency, however, stated its intention to conclude the review in the third quarter of the current year, per Reuters, quoted on Yahoo Finance (read: ETF Areas in Focus on Fitch Downgrade of Credit Rating).
The move weighed both on the stock and bond markets. The benchmark U.S. treasury yields hit the highest levels since November. The benchmark U.S. treasury yield started the week at 3.97%, hit a high of 4.20% on Aug 3, closed the week at 4.05% (read: Inverse Treasury ETFs to Play as 10-Yr Yield at Highest Since November).
If this was not enough, ADP reported much stronger private sector job gains in July than economists expected. Private sector jobs increased by 324,000 in July, following a revised 455,000 increase in June. The data breezed past economists’ expectations (surveyed by FactSet) of 185,000 job creations, as quoted on Barrons.
While this piece of information triggered the chances of further Fed rate hikes, U.S. non-farm payrolls numbers came in at light on Aug 4 and quelled the Fed rate hike bet a bit. The U.S. economy created 187,000 jobs in July of 2023, below market expectations of 200,000 and following a downwardly revised 185,000 in June.
Among the key earnings releases, Amazon (AMZN - Free Report) shares soared after reporting a blockbuster result while Apple (AAPL - Free Report) shares slumped as slowing hardware sales. Overall, the broader market was edgy and the volatility-gauging index CBOE Volatility Index (VIX) gained 24.1% last week. Oil prices remained steady with WTI crude ETF United States Oil ETF (USO - Free Report) adding 1.4% last week.
Against this backdrop, below we highlight a few winning ETFs of last week.
The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income. The fund charges 50 bps in fees.
Simplify Tail Risk Strategy ETF – Up 11.2%
The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 84 bps in fees.
AXS Short Innovation Daily ETF (SARK - Free Report) – Up 8.5%
The AXS Short Innovation Daily ETF seeks the daily inverse investment results and is intended to be used as a short-term trading vehicle. The fund charges 75 bps in fees.
YieldMax AMZN Option Income Strategy ETF (AMZY - Free Report) – Up 6.7%
The YieldMax AMZN Option Income Strategy ETF is an actively managed fund that seeks to generate monthly income by selling/writing call options on AMZN. The fund charges 99 bps in fees.
Advocate Rising Rate Hedge ETF – Up 4.4%
The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.
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5 Top-Performing ETFs of Last Week
Wall Street delivered downbeat performances last week with the S&P 500 losing 2.3%, the Dow Jones retreating 1.1%, the Nasdaq Composite falling 2.9% and the Russell 2000 dropping 1.2% (read: Time for Value ETFs as Buffett Indicator Signals Caution?).
Notably, Rating agency Fitch downgraded the United States’ credit rating to AA+ from AAA last week, expecting fiscal deterioration over the next three years and repeated last minute debt ceiling negotiations that can pressurize the government’s ability to pay its bills.
Fitch initially raised concerns about a potential downgrade in May and continued to support that stance in June after the resolution of the debt ceiling crisis. The agency, however, stated its intention to conclude the review in the third quarter of the current year, per Reuters, quoted on Yahoo Finance (read: ETF Areas in Focus on Fitch Downgrade of Credit Rating).
The move weighed both on the stock and bond markets. The benchmark U.S. treasury yields hit the highest levels since November. The benchmark U.S. treasury yield started the week at 3.97%, hit a high of 4.20% on Aug 3, closed the week at 4.05% (read: Inverse Treasury ETFs to Play as 10-Yr Yield at Highest Since November).
If this was not enough, ADP reported much stronger private sector job gains in July than economists expected. Private sector jobs increased by 324,000 in July, following a revised 455,000 increase in June. The data breezed past economists’ expectations (surveyed by FactSet) of 185,000 job creations, as quoted on Barrons.
While this piece of information triggered the chances of further Fed rate hikes, U.S. non-farm payrolls numbers came in at light on Aug 4 and quelled the Fed rate hike bet a bit. The U.S. economy created 187,000 jobs in July of 2023, below market expectations of 200,000 and following a downwardly revised 185,000 in June.
Among the key earnings releases, Amazon (AMZN - Free Report) shares soared after reporting a blockbuster result while Apple (AAPL - Free Report) shares slumped as slowing hardware sales. Overall, the broader market was edgy and the volatility-gauging index CBOE Volatility Index (VIX) gained 24.1% last week. Oil prices remained steady with WTI crude ETF United States Oil ETF (USO - Free Report) adding 1.4% last week.
Against this backdrop, below we highlight a few winning ETFs of last week.
ETFs in Focus
Simplify Interest Rate Hedge ETF (PFIX - Free Report) – Up 12.2%
The Simplify Interest Rate Hedge ETF seeks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, while providing the potential for income. The fund charges 50 bps in fees.
Simplify Tail Risk Strategy ETF – Up 11.2%
The Simplify Tail Risk Strategy ETF seeks to provide investors with a standalone solution for hedging diversified portfolios against severe equity market selloffs. The fund charges 84 bps in fees.
AXS Short Innovation Daily ETF (SARK - Free Report) – Up 8.5%
The AXS Short Innovation Daily ETF seeks the daily inverse investment results and is intended to be used as a short-term trading vehicle. The fund charges 75 bps in fees.
YieldMax AMZN Option Income Strategy ETF (AMZY - Free Report) – Up 6.7%
The YieldMax AMZN Option Income Strategy ETF is an actively managed fund that seeks to generate monthly income by selling/writing call options on AMZN. The fund charges 99 bps in fees.
Advocate Rising Rate Hedge ETF – Up 4.4%
The Advocate Rising Rate Hedge ETF is a multi-asset ETF that seeks to generate capital appreciation during periods of rising long term interest rates, specifically interest rates with maturities of five years or longer. The fund charges 85 bps in fees.