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5 Best ETF Areas of Last Week

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Wall Street was upbeat last week with the S&P 500 gaining 1.2%, the Dow Jones inching up 0.7% and the Nasdaq Composite adding 2.3%. The S&P 500 and the Dow Jones hit a record high on Friday as tech stocks jumped.

The S&P 500 and the Dow Jones Industrial Average reached record closing highs. The S&P 500 closed at 4,839 on Friday, marking its first record close since January 2022. The Dow Jones settled at 37,863, with over a 1% gain.

The Nasdaq Composite, known for its tech-heavy composition, was the top performer in percentage terms, closing at 15,310, a 1.7% increase. However, this is still below its record close of 16,057 from November 2021.

Positive retail sales data and favorable consumer sentiment reports have led investors to adjust their expectations for the Federal Reserve's interest rate policies, anticipating the first rate cut to be in May instead of March (read: Fed Rate Cut Bets Ease: 5 ETF Areas at a 52-Week High).

Notably, retail sales for the month increased by 0.6%, outperforming the Dow Jones estimate of 0.4%, as quoted on CNBC. Meanwhile, the University of Michigan’s Survey of Consumers showed a reading of 78.8 for January, its highest level since July 2021 (read: 4 ETF Areas & Stocks to Win on Upbeat December Retail Sales).

On a two-month basis, sentiment showed its largest increase since 1991, said Joanne Hsu, the survey’s director, as quoted on CNBC. Consumer sentiment has improved amid a drop in gasoline prices and solid stock market gains.

Big Tech Back in Focus

Investor attention has shifted back to Big Tech stocks, which have been fundamental drivers of market growth. The late 2023 rally's momentum appears to be sustained by continued investment in AI and other tech advancements.

According to Truist's co-CIO, as mentioned in a Yahoo Finance interview, the significant influence of seven major tech companies, often referred to as the "Magnificent Seven," is notable. These companies still hold about 30% weight in the S&P 500, indicating that the movement of these Big Tech stocks significantly impacts the overall market.

ETFs in Focus

Against this backdrop, below we highlight a few winning ETFs of last week.

Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 16.3%

Recent weeks have seen a surge in security threats in the Red Sea, primarily due to attacks by Yemen-based Houthi militants. This has forced shipping companies to adjust their usual navigation routes, resulting in an unintended substantial rise in freight rates.

VanEck Semiconductor ETF (SMH - Free Report) ) – Up 8.2%

Big tech stocks led the market higher last week following a bullish AI-fueled revenue outlook from TSMC (TSM), a key supplier to Apple and Nvidia (NVDA - Free Report) . The Taiwanese contract chipmaker's profit fell but beat Wall Street estimates. TSMC earnings results acted as a cornerstone for the entire semiconductor space as shares of AMD (AMD - Free Report) and other chipmakers also surged in late last week.

Teucrium Sugar Fund (CANE - Free Report) ) – Up 6.7%

Raw sugar futures hit the highest level in one month, amid concerns of lower supply from Asian producers and slight risks to the ample output from Brazil. Hot weather in Southeast Asia, caused by the dryness brought by El Nino, drove key Indian-producing regions to limit their sugar crops.

Simplify Interest Rate Hedge ETF (PFIX - Free Report) ) – Up 6.2%

As rates rose considerably last week on easing bets over Fed rate cuts, PFIX that gives protection against interest rates, rose last week.

Roundhill Sports Betting & iGaming ETF (BETZ - Free Report) ) – Up 5%

It is a booming industry and total revenue is expected to reach almost $10 billion in 2024, as quoted on CNBC. Vermont launched mobile sports betting in the last-to-last week, becoming the latest state to join the budding industry.


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