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Top ETF Stories of October

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October 2018 has seen one of the deadliest stock market gyrations. Historically, the month has witnessed some of the most appalling market crashes. The most horrifying of these is the 1987 one, “which saw the S&P 500 lose more than 20 percent of its value in one day.” The 1929 crash and the 2008 financial crisis' acute sell-offs also took place in October (read: October Traditionally Most Volatile: ETFs That Gained).

This October was no different with stocks seesawing on rising rate worries. U.S.-Sino trade tensions and the resultant pressure on global growth, geopolitical issues and uncertainty around mid-terms also added to Wall Street woes. The initial phase of the month was particularly painful, though it ended on a positive note.

Let’s take a look at the top ETF stories of October.

Worst Month for S&P 500 in 7 Years

The S&P 500 saw a 6.9% loss in October, marking its worst monthly performance since September 2011. SPDR S&P 500 ETF (SPY - Free Report) lost 7.2% in the month (as of Oct 31, 2018). Not only the S&P 500, key indices like Dow Jones and Nasdaq Composite have slipped in the month. Meanwhile, SPDR Dow Jones Industrial Average ETF (DIA - Free Report) fell 5.8% and Invesco QQQ Trust (QQQ - Free Report) plummeted about 8.8%.

Acute Tech Selloff

Tech stocks fared the worst month since the 2008 recession. The Nasdaq plummeted 9.2% in October, its steepest monthly decline since a 10.8% fall in November 2008. FANG stocks were particularly hit by overvaluation concerns. Semiconductor stocks also saw horrible selling pressure (read: Why October Spells Doom for Semis: ETFs in Focus).

Some of the tech ETFs that lost hugely were Invesco DWA Technology Momentum ETF (PTF - Free Report) (down 12.9%), O'Shares Global Internet Giants ETF OGIG (down 12.8%) and SPDR FactSet Innovative Technology ETF (XITK - Free Report) (down 11.9%) (read: Why to Cash in on the Slump & Grab Tech ETFs).

Safe Assets Hold Ground

With rising rate worries weighing on the broader equity market, some investors might have thought that rate-sensitive sectors like consumer staples and utility will underperform. These sectors are high-yielding in nature but rising treasury yields usually deals a blow to high dividend-paying stocks (read: Shrug Off Rate Fears, Consumer Staples ETFs Are on a Tear).

Contrary to the trend, these sector ETFs did pretty well. Consumer Staples Select Sector SPDR ETF (XLP - Free Report) added 1.3% in October and Utilities Select Sector SPDR ETF (XLU - Free Report) advanced 4.2%. Not only these safe equity sectors, safe-haven assert gold also jumped in the month despite moderate strength in the dollar. Gold bullion fund SPDR Gold Shares (GLD - Free Report) added more than 3% in October. 

Marijuana Loses High

After an amazing stretch over the past few months, marijuana ETF plunged in October as Canada’s legalization in mid-month was overbought. Profit booking probably made this once-soaring space dive in October and ETFMG Alternative Harvest ETF MJ lost 26.9% in the month (as of Oct 30, 2018) (read: ETF Areas That Spooked Investors in October).

Brazil: One of the Best International Markets

Though pain in emerging market investing remained, Brazil ETFs soaredon the win of far-right and investor friendly candidate Jair Bolsonaro in the first round of Brazil’s presidential election on Oct 7. He became the president of the country on Oct 28, having defeated leftist Workers’ Party candidate Fernando Haddad with 55% of the votes.

He has already been pushing for the existing administration to rework the pension bill before his inauguration on Jan 1, per Wall Street Journal. iShares MSCI Brazil Small-Cap ETF (EWZS - Free Report) is up 23.7% in the month and VanEck Vectors Brazil Small-Cap ETF (BRF - Free Report) gained about 23.9%. iShares MSCI Brazil Capped ETF (EWZ - Free Report) rose 19.8% in October (as of Oct 30, 2018) (read: What EM Shock? Brazil ETFs Soar on Election Optimism).

Car ETF Sees a Month-End Bounce on China Stimulus

Chinese regulators are reportedly mulling over a 50% cut in the nation's auto tax to 5%, per Bloomberg. The measure would be applicable to cars with engines not bigger than 1.6 liters. The tax cut looks to offer support to China's auto industry as trade war tensions with the United States threatens to weaken the Chinese economy as well as demand for vehicles.

Prospects of stimulus from the largest automobile market of the world boosted the ailing car ETF First Trust NASDAQ Global Auto ETF (CARZ - Free Report) . The fund is down 6.4% this year but gained 5.3% in the past five days (as of Oct 31, 2018) on stimulus hopes (read: What'll Impact Auto ETF Ahead: China Stimulus or Trade Worry?).

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