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Fed Meet Signals December Rate Hike: ETFs That Gained
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As widely expected, the Fed kept the rates at 2.00-2.25%. The apex bank addressed the well-being of the labor market and the strong growth momentum of the U.S. economy while showed confidence on the pickup in inflation.
Investors should note that the latest data for the headline jobless level was at 3.7%, the lowest since December 1969. With this, market watchers expect the Fed to enact the fourth-rate hike of this year in December.
Market Reaction
As the tone was upbeat, the Treasury market did not give any wild reaction. In fact, the yield on 10-year U.S. Treasury rose to 3.24% on Nov 8 from 3.22% recorded on the previous day. In fact, iShares 20+ Year Treasury Bond ETF (TLT - Free Report) lost about 0.01% on Nov 8. Invesco DB US Dollar Bullish (UUP - Free Report) was up 0.6% on the same day.
Top U.S. ETFs like SPDR S&P 500 ETF (SPY - Free Report) (down 0.2%), SPDR Dow Jones Industrial Average ETF (DIA - Free Report) (up 0.1%) and Invesco QQQ Trust (QQQ - Free Report) (down 0.6%) put up mixed performances on Nov 8.
Against this backdrop, we highlight a few ETF areas that have gained considerably on Nov 8.
Rising interest rates in the United States have dulled the appeal for the emerging market stocks this year.As the Fed sounds hawkish and the greenback gained, emerging markets took a dive.iShares MSCI Emerging Markets ETF (EEM) lost more than 2.5% on Nov 8. The fund gives 300% of the inverse of the price performance of the MSCI Emerging Markets Index (read: 7 Leveraged/Inverse ETFs Off to a Strong Start in October).
The underlying BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged Exchange Traded Notes is linked to the performance of the NYSE FANG+ Index. The index gives exposure to highly-traded growth stocks of technology and tech-enabled companies. With rising rate worries playing foul, the inverse leveraged fund gained considerably on Nov 8 (read: 5 Inverse ETFs Making Hay Amid Tech Rout).
Global X S&P 500 Quality Dividend ETF (QDIV - Free Report) – Up 4.41%
Since the possibilities of faster Fed rate hike may cause disturbances in the market, quality dividend ETF should be on investors’ radar. The underlying S&P 500 Quality High Dividend Index measures the performance of S&P 500 stocks that exhibit both high quality and high dividend yield characteristics.
ProShares Ultra FTSE Europe (UPV - Free Report) – Up 4.4%
An upbeat earnings season and still low rate of environment have probably boosted European stocks. The fund gives two times the daily performance of the FTSE Developed Europe All Cap Index.
An improving economy with a strengthening labor market and a moderately rising interest rate environment is great for consumer discretionary stocks. Moreover, the fourth quarter is pretty favorable for retail companies as they make heavy bucks from the holiday buying (read: Consumer Confidence at 18-Year High: 5 ETFs to Buy).
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Fed Meet Signals December Rate Hike: ETFs That Gained
As widely expected, the Fed kept the rates at 2.00-2.25%. The apex bank addressed the well-being of the labor market and the strong growth momentum of the U.S. economy while showed confidence on the pickup in inflation.
Investors should note that the latest data for the headline jobless level was at 3.7%, the lowest since December 1969. With this, market watchers expect the Fed to enact the fourth-rate hike of this year in December.
Market Reaction
As the tone was upbeat, the Treasury market did not give any wild reaction. In fact, the yield on 10-year U.S. Treasury rose to 3.24% on Nov 8 from 3.22% recorded on the previous day. In fact, iShares 20+ Year Treasury Bond ETF (TLT - Free Report) lost about 0.01% on Nov 8. Invesco DB US Dollar Bullish (UUP - Free Report) was up 0.6% on the same day.
Top U.S. ETFs like SPDR S&P 500 ETF (SPY - Free Report) (down 0.2%), SPDR Dow Jones Industrial Average ETF (DIA - Free Report) (up 0.1%) and Invesco QQQ Trust (QQQ - Free Report) (down 0.6%) put up mixed performances on Nov 8.
Against this backdrop, we highlight a few ETF areas that have gained considerably on Nov 8.
Direxion Daily MSCI Emerging Markets Bear 3X ETF (EDZ - Free Report) — Up 7.46%
Rising interest rates in the United States have dulled the appeal for the emerging market stocks this year.As the Fed sounds hawkish and the greenback gained, emerging markets took a dive.iShares MSCI Emerging Markets ETF (EEM) lost more than 2.5% on Nov 8. The fund gives 300% of the inverse of the price performance of the MSCI Emerging Markets Index (read: 7 Leveraged/Inverse ETFs Off to a Strong Start in October).
MicroSectors FANG+ -3X Invers Leveraged ETN (FNGD - Free Report) – Up 5.19%
The underlying BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged Exchange Traded Notes is linked to the performance of the NYSE FANG+ Index. The index gives exposure to highly-traded growth stocks of technology and tech-enabled companies. With rising rate worries playing foul, the inverse leveraged fund gained considerably on Nov 8 (read: 5 Inverse ETFs Making Hay Amid Tech Rout).
Global X S&P 500 Quality Dividend ETF (QDIV - Free Report) – Up 4.41%
Since the possibilities of faster Fed rate hike may cause disturbances in the market, quality dividend ETF should be on investors’ radar. The underlying S&P 500 Quality High Dividend Index measures the performance of S&P 500 stocks that exhibit both high quality and high dividend yield characteristics.
ProShares Ultra FTSE Europe (UPV - Free Report) – Up 4.4%
An upbeat earnings season and still low rate of environment have probably boosted European stocks. The fund gives two times the daily performance of the FTSE Developed Europe All Cap Index.
Direxion Retail Bull 3X (RETL - Free Report) – Up 3.31%
An improving economy with a strengthening labor market and a moderately rising interest rate environment is great for consumer discretionary stocks. Moreover, the fourth quarter is pretty favorable for retail companies as they make heavy bucks from the holiday buying (read: Consumer Confidence at 18-Year High: 5 ETFs to Buy).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>