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Last month witnessed a surge in stock values, marking five consecutive weeks of gains, helped by investor belief that the Fed might begin cutting interest rates early in the coming year. This optimism, however, has recently led to a decrease in Treasury yields, despite Fed Chair Jerome Powell's resistance to suggestions of halting rate increases.
Still, talks are now doing rounds that the latest rally in stocks and bonds has been excessive. Against this backdrop, December has unfolded for investors. So far this month, Wall Street remained more-or-less flat. But a few ETF areas have been hovering at around a month-high and have been still gaining strength. Below we highlight a few of those.
ETF Areas in Focus
Blockchain
Global X Blockchain & Bitcoin Strategy ETF (BITS - Free Report) – Up 9.2% on Dec 4
Teucrium Corn Fund Hashdex Bitcoin (DEFI) – Up 7.6%
Bitcoin, the world's largest cryptocurrency, surged past the $42,000 mark for the first time since April 2022. This represents a year-over-year increase of 142% in the cryptocurrency value. The milestone came on the back of broad enthusiasm about U.S. interest rate cuts and the likelihood of regulatory approval for Bitcoin ETFs (read: Bitcoin Reaches $42,000: 5 ETFs More Than Double in 2023).
Cannabis
Listed Roundhill Cannabis ETF (WEED - Free Report) – Up 5.8% on Dec 4
Global X Cannabis ETF – Up 5.6%
Amplify Seymour Cannabis ETF (CNBS) – Up 4.5%
The cannabis industry experienced significant growth and a rally in cannabis stocks in late 2023. This growth was driven by increasing legalization and public acceptance, marking a shift from a temporary surge to a stable, long-term market segment. Two notable companies in this trend were Trulieve Cannabis Corp and Cresco Labs Inc.
In Q3 of 2023, Trulieve Cannabis Corp reported $275 million in revenue, with a substantial gross margin of 52%, resulting in a gross profit of $143 million. Their stock witnessed a 40.52% increase in the last month of trading as of November 29th, 2023???. Cresco Labs’ stock increased by 48.28% in the last month of trading as of November 29th, 2023???.
An improving economy, rebounding consumer confidence, increased holiday travels among consumers and merger activities in the airlines sector probably have boosted the fund.
Small-Caps
S&P Small-Cap Consumer Staples (PSCC - Free Report) – Up 2.3% on Dec 4
S&P Small-Cap 600 Pure Value Invesco (RZV) – Up 1.6%
The small-cap Russell 2000 has been in great momentum. This rally coincides with cooling inflation data. Eric Green, CIO of Penn Capital Management, suggests that this rally has been long overdue, given the prolonged outperformance of large-cap stocks, as quoted on Yahoo Finance. Valuations for small-cap companies have become compressed relative to their larger counterparts, making them an attractive option for investors (read: Small-Cap Rally in the Cards at Year-End & Beyond? ETFs in Focus).
Regional Banks
KBW Regional Banking Invesco ETF (KBWR - Free Report) – Up 1.9% on Dec 4
Nasdaq Aba Community Bank Index (QABA) – Up 1.6%
The talks of a less-hawkish Fed in 2024 or even Fed rate cuts in late-2024 should steepen the yield curve next year. This is a plus for the banking stocks as a steepening yield curve raises the net interest rate margin.
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5 ETF Areas At One-Month High to Start December
Last month witnessed a surge in stock values, marking five consecutive weeks of gains, helped by investor belief that the Fed might begin cutting interest rates early in the coming year. This optimism, however, has recently led to a decrease in Treasury yields, despite Fed Chair Jerome Powell's resistance to suggestions of halting rate increases.
Still, talks are now doing rounds that the latest rally in stocks and bonds has been excessive. Against this backdrop, December has unfolded for investors. So far this month, Wall Street remained more-or-less flat. But a few ETF areas have been hovering at around a month-high and have been still gaining strength. Below we highlight a few of those.
ETF Areas in Focus
Blockchain
Global X Blockchain & Bitcoin Strategy ETF (BITS - Free Report) – Up 9.2% on Dec 4
Proshares Bitcoin Strategy ETF (BITO - Free Report) – Up 7.7%
Teucrium Corn Fund Hashdex Bitcoin (DEFI) – Up 7.6%
Bitcoin, the world's largest cryptocurrency, surged past the $42,000 mark for the first time since April 2022. This represents a year-over-year increase of 142% in the cryptocurrency value. The milestone came on the back of broad enthusiasm about U.S. interest rate cuts and the likelihood of regulatory approval for Bitcoin ETFs (read: Bitcoin Reaches $42,000: 5 ETFs More Than Double in 2023).
Cannabis
Listed Roundhill Cannabis ETF (WEED - Free Report) – Up 5.8% on Dec 4
Global X Cannabis ETF – Up 5.6%
Amplify Seymour Cannabis ETF (CNBS) – Up 4.5%
The cannabis industry experienced significant growth and a rally in cannabis stocks in late 2023. This growth was driven by increasing legalization and public acceptance, marking a shift from a temporary surge to a stable, long-term market segment. Two notable companies in this trend were Trulieve Cannabis Corp and Cresco Labs Inc.
In Q3 of 2023, Trulieve Cannabis Corp reported $275 million in revenue, with a substantial gross margin of 52%, resulting in a gross profit of $143 million. Their stock witnessed a 40.52% increase in the last month of trading as of November 29th, 2023???. Cresco Labs’ stock increased by 48.28% in the last month of trading as of November 29th, 2023???.
Airlines
US Global Jets ETF (JETS - Free Report) – Up 4.3% on Dec 4
An improving economy, rebounding consumer confidence, increased holiday travels among consumers and merger activities in the airlines sector probably have boosted the fund.
Small-Caps
S&P Small-Cap Consumer Staples (PSCC - Free Report) – Up 2.3% on Dec 4
S&P Small-Cap 600 Pure Value Invesco (RZV) – Up 1.6%
The small-cap Russell 2000 has been in great momentum. This rally coincides with cooling inflation data. Eric Green, CIO of Penn Capital Management, suggests that this rally has been long overdue, given the prolonged outperformance of large-cap stocks, as quoted on Yahoo Finance. Valuations for small-cap companies have become compressed relative to their larger counterparts, making them an attractive option for investors (read: Small-Cap Rally in the Cards at Year-End & Beyond? ETFs in Focus).
Regional Banks
KBW Regional Banking Invesco ETF (KBWR - Free Report) – Up 1.9% on Dec 4
Nasdaq Aba Community Bank Index (QABA) – Up 1.6%
The talks of a less-hawkish Fed in 2024 or even Fed rate cuts in late-2024 should steepen the yield curve next year. This is a plus for the banking stocks as a steepening yield curve raises the net interest rate margin.