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Wall Street delivered a decent performance in March with the S&P 500 adding 3.1%, the Dow Jones gaining 2.1% and the Nasdaq advancing 1.8%. Dovish Fed comments helped the stock market stay strong last month. Let’s delve a little deeper into the top ETF stories of the month as some of these should be tracked carefully in April.
Course of Interest Rates
In March, the Federal Reserve decided to keep interest rates unchanged, maintaining the benchmark rate in the range of 5.25-5.50%. No officials see rates going up in 2024. In fact, despite previous expectations of a lesser number of rate cuts due to recently-released hot inflation numbers, the Fed still anticipates the need for three rate cuts in 2024.
The decision to maintain the forecast for three rate cuts in 2024 comes amid concerns over persistently high inflation. However, the Fed’s preferred personal consumption expenditures price index (PCE) excluding food and energy rose 2.8% on a 12-month basis and was up 0.3% sequentially, matching estimates.
Core PCE was up 0.3% for the month and 2.5% at the 12-month rate, compared to estimates for 0.4% and 2.5%, per CNBC. Meanwhile, the latest report on fourth quarter GDP for the year 2023, released last week, revealed that the US economy expanded at a 3.4% rate, up from the previous estimate of 3.2%. US manufacturing sector grew in March for the first time in 1.5 years.
Such data points strengthened the bets for a later-than-expected Fed rate cuts as the Fed economy is showing strong resilience. And the Fed might wait for more evidence of softening in price inflation before deciding to cut rates.
We expect a moderately high interest rate environment in April if things remain the same. ETFs like FolioBeyond Alternative Income and Int Rt Hdg ETF (RISR - Free Report) – that underperforms when rates fall – declined 1.3% in March. One should keep a close tab on ETFs like RISR, and Simplify Interest Rate Hedge ETF (PFIX - Free Report) (down 4.1%). These might see some gains.
Can Mining Stocks Maintain the Rally?
Meanwhile, gold gained last month with the gold bullion ETF SPDR Gold Shares (GLD - Free Report) gaining 8.7%. The reason behind the rally was the rise of the geopolitical risk, be it Hamas & Israel or Russia - Ukraine. The central banks have consistently bought gold. Notably, gold is viewed as a safe haven asset. Dovish Fed comments also went in favor of gold investing.
Like gold, silver prices also gained. Silver bullion ETF iShares Silver Trust (SLV - Free Report) was up 9.7% last month. Apart from the safe-haven status, silver also has usage in industrial activities. Notably, mining stocks often act as leveraged plays of the underlying metal. Hence, gold and silver mining ETFs rallied in March.
If rates remain at low levels, we may further rally in gold and silver mining ETFs like iShares MSCI Global Silver and Metals Miners ETF (SLVP - Free Report) (up 24.2% past month),U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report) (up 22.7%) and Sprott Junior Gold Miners ETF (SGDJ - Free Report) (up 19.9%) and vice versa.
What Will Happen to Bitcoin Stocks After Having?
Bitcoin is slated for a halving event on Apr 20, 2024. While the event will cut the supply growth of bitcoin, which should push bitcoin prices up, many investors believe that the event is already priced-in. Bitcoin has gained 15.3% in March. It had surpassed the $73,000 level earlier in March.
Several crypto stocks have surged substantially last month,withFirst Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT - Free Report) gaining about 22.9%. But the upcoming having event will likely put pressure on the margins of mining companiesas the miners’ rewards will be cut twice. This can also result in a drop in the value of the main cryptocurrency, which in turn can negatively affect crypto stocks, per investorplace.com.
But then, hedge fund manager Mark Yusko is predicting bitcoin will more than double this year to $150,000. “The big move happens post-halving,” said Yusko. “It starts to become more … parabolic toward the end of the year. And, historically about nine months after the halving, so sometime toward Thanksgiving, Christmas, we see the peak in price before the next bear market,” as quoted on CNBC.
If we go by this projection, then more rally in cards for CRPT. So, bitcoin needs to be watched very closely post having in late April.
Can Marijuana Stay on a High?
A rescheduling of status seems to be a certainty for marijuana. In a recent White House meeting, Vice President Kamala Harris urged the DEA to expedite the rescheduling of marijuana, criticizing its current Schedule 1 classification as "absurd" and "patently unfair." She put stress on the need for swift action and highlighted ongoing efforts toward rescheduling.
Amplify Alternative Harvest ETF (MJ - Free Report) came across as the best ETF of March, having surged by 24.6%. Other pot ETFs also followed suit. AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) is up as high as 48% in Q1 of 2024 on high optimism about rescheduling. The fund has gained 76% in the past one year. But isn’t the move already baked-in current prices?
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Top ETF Stories of March to Be Watched in April
Wall Street delivered a decent performance in March with the S&P 500 adding 3.1%, the Dow Jones gaining 2.1% and the Nasdaq advancing 1.8%. Dovish Fed comments helped the stock market stay strong last month. Let’s delve a little deeper into the top ETF stories of the month as some of these should be tracked carefully in April.
Course of Interest Rates
In March, the Federal Reserve decided to keep interest rates unchanged, maintaining the benchmark rate in the range of 5.25-5.50%. No officials see rates going up in 2024. In fact, despite previous expectations of a lesser number of rate cuts due to recently-released hot inflation numbers, the Fed still anticipates the need for three rate cuts in 2024.
The decision to maintain the forecast for three rate cuts in 2024 comes amid concerns over persistently high inflation. However, the Fed’s preferred personal consumption expenditures price index (PCE) excluding food and energy rose 2.8% on a 12-month basis and was up 0.3% sequentially, matching estimates.
Core PCE was up 0.3% for the month and 2.5% at the 12-month rate, compared to estimates for 0.4% and 2.5%, per CNBC. Meanwhile, the latest report on fourth quarter GDP for the year 2023, released last week, revealed that the US economy expanded at a 3.4% rate, up from the previous estimate of 3.2%. US manufacturing sector grew in March for the first time in 1.5 years.
Such data points strengthened the bets for a later-than-expected Fed rate cuts as the Fed economy is showing strong resilience. And the Fed might wait for more evidence of softening in price inflation before deciding to cut rates.
We expect a moderately high interest rate environment in April if things remain the same. ETFs like FolioBeyond Alternative Income and Int Rt Hdg ETF (RISR - Free Report) – that underperforms when rates fall – declined 1.3% in March. One should keep a close tab on ETFs like RISR, and Simplify Interest Rate Hedge ETF (PFIX - Free Report) (down 4.1%). These might see some gains.
Can Mining Stocks Maintain the Rally?
Meanwhile, gold gained last month with the gold bullion ETF SPDR Gold Shares (GLD - Free Report) gaining 8.7%. The reason behind the rally was the rise of the geopolitical risk, be it Hamas & Israel or Russia - Ukraine. The central banks have consistently bought gold. Notably, gold is viewed as a safe haven asset. Dovish Fed comments also went in favor of gold investing.
Like gold, silver prices also gained. Silver bullion ETF iShares Silver Trust (SLV - Free Report) was up 9.7% last month. Apart from the safe-haven status, silver also has usage in industrial activities. Notably, mining stocks often act as leveraged plays of the underlying metal. Hence, gold and silver mining ETFs rallied in March.
If rates remain at low levels, we may further rally in gold and silver mining ETFs like iShares MSCI Global Silver and Metals Miners ETF (SLVP - Free Report) (up 24.2% past month),U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU - Free Report) (up 22.7%) and Sprott Junior Gold Miners ETF (SGDJ - Free Report) (up 19.9%) and vice versa.
What Will Happen to Bitcoin Stocks After Having?
Bitcoin is slated for a halving event on Apr 20, 2024. While the event will cut the supply growth of bitcoin, which should push bitcoin prices up, many investors believe that the event is already priced-in. Bitcoin has gained 15.3% in March. It had surpassed the $73,000 level earlier in March.
Several crypto stocks have surged substantially last month,withFirst Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT - Free Report) gaining about 22.9%. But the upcoming having event will likely put pressure on the margins of mining companiesas the miners’ rewards will be cut twice. This can also result in a drop in the value of the main cryptocurrency, which in turn can negatively affect crypto stocks, per investorplace.com.
But then, hedge fund manager Mark Yusko is predicting bitcoin will more than double this year to $150,000. “The big move happens post-halving,” said Yusko. “It starts to become more … parabolic toward the end of the year. And, historically about nine months after the halving, so sometime toward Thanksgiving, Christmas, we see the peak in price before the next bear market,” as quoted on CNBC.
If we go by this projection, then more rally in cards for CRPT. So, bitcoin needs to be watched very closely post having in late April.
Can Marijuana Stay on a High?
A rescheduling of status seems to be a certainty for marijuana. In a recent White House meeting, Vice President Kamala Harris urged the DEA to expedite the rescheduling of marijuana, criticizing its current Schedule 1 classification as "absurd" and "patently unfair." She put stress on the need for swift action and highlighted ongoing efforts toward rescheduling.
Amplify Alternative Harvest ETF (MJ - Free Report) came across as the best ETF of March, having surged by 24.6%. Other pot ETFs also followed suit. AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) is up as high as 48% in Q1 of 2024 on high optimism about rescheduling. The fund has gained 76% in the past one year. But isn’t the move already baked-in current prices?