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September Turns Out as Worst Month of 2023: ETF Winners
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September is historically the worst month of the year for stocks. According to moneychimp.com, a consensus carried out from 1950 to 2022 has revealed that September ended up offering positive returns in 32 years and negative returns in 41 years, with an average return of negative 0.80%, which is worse than any other month. This year also, the month lived up to its reputation.
The S&P 500 and the technology-heavy Nasdaq Composite have dropped 2.9% and 3.6% this week, respectively. That represented three negative weeks in a row and worst weekly performance since March for each. The blue-chip Dow slid 1.9% on the week.
All three key indexes are way for their losses this month. The S&P 500 is likely to close out the month down 4.6% and the quarter lower by 3.4%. The Nasdaq Composite is off nearly 6% in September, and down 4.3% for the quarter. This month will be the worst in 2023 for both indexes. The Dow is on track to log a 3% decline this month and a 2.2% slump for the quarter.
Still-sticky inflation, cooling-but-still-steady jobs market, rising oil prices, worries about government shutdown and last but not the least the higher-for-longer rate cues weighed on the market momentum. All these make it more important to pin point ETFs that have topped the chart so far in the month.
In a significant development, the Department of Health and Human Services (HHS) has recently initiated a review of marijuana's classification under the Controlled Substances Act. This move has the potential to impact the burgeoning marijuana industry favorably, which has faced federal restrictions despite state-level legalization efforts.
Since the 1970s, marijuana has been categorized as a Schedule I drug, alongside substances like heroin and LSD. The Drug Enforcement Agency (DEA) will consider reclassifying marijuana as a Schedule III drug, placing it alongside substances like ketamine, anabolic steroids, and testosterone. This change-over would be greatly beneficial for the pot companies (read: Behind the Recent Surge in Marijuana ETFs).
Uranium price has been witnessing a significant surge, driven by an upbeat demand forecast and lingering supply concerns amid the chances of sanctions affecting Russia's nuclear fuel supply. Interest in nuclear power is also on the rise, presenting a promising opportunity for investors who anticipate global concerns about climate change to drive increased demand for this energy source.
Fed Chair Jerome Powell emphasized the need for continued vigilance in the battle against inflation in the third quarter. Powell also emphasized in September that even though inflation has moderated slightly from its peak, it is still at an undesirable level. This has led to further rate hikes or high-for-longer interest rates. Hence, the fund PFIX, which looks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, won in the third quarter.
Energy – United States Brent Oil Fund LP (BNO - Free Report) ) – Up 12.4%
Oil prices remained at a solid shape due to reduced supplies and ebbing U.S. recession fears. Oil futures touched a fresh 2023 high of more than $95 on Sep 27 after inventories at the largest storage hub in the United States dropped toward levels nearing operational minimums.
Saudi Arabia prolonged its voluntary one-million-barrel oil supply cut through to the end of the year. Russia too has moved to draw down global inventories and vowed to cut oil exports by 300,000 barrels per day until the end of the year (read: Top ETF Stories of Q3).
Global trade is showing promising signs of recovery, as evident from the insights of Vincent Clerc, the CEO of shipping giant Maersk. Despite recent challenges, Clerc anticipates a gradual rebound in the shipping industry as we approach 2024, as quoted on CNBC. Vincent Clerc points to consumers in the United States and Europe will act as key tailwinds in the current surge in demand (read: Time for Shipping ETFs Amid Improving Global Trade Scenario?).
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September Turns Out as Worst Month of 2023: ETF Winners
September is historically the worst month of the year for stocks. According to moneychimp.com, a consensus carried out from 1950 to 2022 has revealed that September ended up offering positive returns in 32 years and negative returns in 41 years, with an average return of negative 0.80%, which is worse than any other month. This year also, the month lived up to its reputation.
The S&P 500 and the technology-heavy Nasdaq Composite have dropped 2.9% and 3.6% this week, respectively. That represented three negative weeks in a row and worst weekly performance since March for each. The blue-chip Dow slid 1.9% on the week.
All three key indexes are way for their losses this month. The S&P 500 is likely to close out the month down 4.6% and the quarter lower by 3.4%. The Nasdaq Composite is off nearly 6% in September, and down 4.3% for the quarter. This month will be the worst in 2023 for both indexes. The Dow is on track to log a 3% decline this month and a 2.2% slump for the quarter.
Still-sticky inflation, cooling-but-still-steady jobs market, rising oil prices, worries about government shutdown and last but not the least the higher-for-longer rate cues weighed on the market momentum. All these make it more important to pin point ETFs that have topped the chart so far in the month.
ETF Areas in Focus
Cannabis – Roundhill Cannabis ETF (WEED - Free Report) ) – Up 65.6%
In a significant development, the Department of Health and Human Services (HHS) has recently initiated a review of marijuana's classification under the Controlled Substances Act. This move has the potential to impact the burgeoning marijuana industry favorably, which has faced federal restrictions despite state-level legalization efforts.
Since the 1970s, marijuana has been categorized as a Schedule I drug, alongside substances like heroin and LSD. The Drug Enforcement Agency (DEA) will consider reclassifying marijuana as a Schedule III drug, placing it alongside substances like ketamine, anabolic steroids, and testosterone. This change-over would be greatly beneficial for the pot companies (read: Behind the Recent Surge in Marijuana ETFs).
Uranium Miners – Sprott Junior Uranium Miners ETF (URNJ - Free Report) ) – Up 30.7%
Uranium price has been witnessing a significant surge, driven by an upbeat demand forecast and lingering supply concerns amid the chances of sanctions affecting Russia's nuclear fuel supply. Interest in nuclear power is also on the rise, presenting a promising opportunity for investors who anticipate global concerns about climate change to drive increased demand for this energy source.
Interest Rate Hedged – Simplify Interest Rate Hedge ETF (PFIX - Free Report) ) – Up 19.6%
Fed Chair Jerome Powell emphasized the need for continued vigilance in the battle against inflation in the third quarter. Powell also emphasized in September that even though inflation has moderated slightly from its peak, it is still at an undesirable level. This has led to further rate hikes or high-for-longer interest rates. Hence, the fund PFIX, which looks to hedge interest rate movements arising from rising long-term interest rates, and to benefit from market stress when fixed income volatility increases, won in the third quarter.
Energy – United States Brent Oil Fund LP (BNO - Free Report) ) – Up 12.4%
Oil prices remained at a solid shape due to reduced supplies and ebbing U.S. recession fears. Oil futures touched a fresh 2023 high of more than $95 on Sep 27 after inventories at the largest storage hub in the United States dropped toward levels nearing operational minimums.
Saudi Arabia prolonged its voluntary one-million-barrel oil supply cut through to the end of the year. Russia too has moved to draw down global inventories and vowed to cut oil exports by 300,000 barrels per day until the end of the year (read: Top ETF Stories of Q3).
Shipping – Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) ) – Up 8.7%
Global trade is showing promising signs of recovery, as evident from the insights of Vincent Clerc, the CEO of shipping giant Maersk. Despite recent challenges, Clerc anticipates a gradual rebound in the shipping industry as we approach 2024, as quoted on CNBC. Vincent Clerc points to consumers in the United States and Europe will act as key tailwinds in the current surge in demand (read: Time for Shipping ETFs Amid Improving Global Trade Scenario?).