The U.S. market reached a record high in April, with the S&P 500, the Dow Jones and the Nasdaq Composite gaining about 3.7%, 2.4% and 5.6%, respectively. A dovish, some upbeat economic data points and a good number of positive earnings surprises so far this reporting season and a steady oil market helped key indexes to attain this height.
Let’s take look at the key happenings of the ETF world in the month.
Q1 U.S. GP Growth Beat Expectations
The U.S. economy grew an annualized 3.2% in the first quarter of 2019, breezing past expectations of 2%, following a 2.2% uptick in the previous three-month period. The expansion marked the best first-quarter growth in four years. The upside was helped by net trade. However, consumer spending — which accounts for more than two-thirds of U.S. GDP — was up just 1.2% versus 2.5% growth seen in the fourth quarter of 2018.
Since small-cap stocks benefit greatly from an uptick in the domestic economy, related ETFs likeiShares Russell 2000 ETF (IWM - Free Report) should surge ahead on this data (read: Small-Caps Beat S&P 500 in Q1: 5 ETF Winners).
Volley of Unicorn IPOs
A host of tech IPOs, namely Zoom and Pinterest, hit the market in April. Uber Technologies has filed for an IPO with the New York Stock Exchange under the symbol “UBER.” This global ride-hailing startup is looking for a valuation of $90 billion and could be the biggest IPO since Alibaba Group (BABA - Free Report) went public in 2014. Before this, Lyft went public in late March. All the euphoria has put Renaissance IPO ETF (IPO - Free Report) in focus (read: IPO ETFs Red-Hot on Zoom & Pinterest Debuts).
Trump to Tighten Sanctions on Iran
The almost year-long U.S.-Iran tensions have taken another turn this week as Washington has announced it won’t renew waivers previously granted on Iran oil import sanctions. In November, Washington offered temporary oil import waivers to eight key buyers — China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea.
But now, the Trump administration plans to toughen the sanctions and stop permitting the above-mentioned countries to import Iranian crude oil. The move has resulted in a sharp spike in oil prices initially, though the liquid commodity fell in late-April after Trump says he pressed OPEC to make up for the lost Iranian output. United States Oil Fund, LP (USO - Free Report) and United States Brent Oil Fund, LP (BNO - Free Report) have advanced about 5% and 6.9%, respectively (read: US Tightens Sanctions on Iran: Country ETFs to Gain/Suffer).
The Brexit deadline has been put off till Oct 31. This was because of huge internal differences in the British parliament as members turned down prime minister Theresa May’s EU withdrawal plea for the third time on Mar 29, the day Britain was scheduled to leave the EU (read: Brexit Delayed: ETFs & Stocks to Gain).
Britain acts as a financial powerhouse of Europe. Thus,iShares MSCI Europe Financials ETF (EUFN - Free Report) has probably heaved a sigh of relief.The fund is up 7.5% in the past one month (as of Apr 26, 2019).
Gold Lost Glitter
Since the greenback has been hovering around a one-year high, gold prices suffered in the month. SPDR Gold Shares (GLD - Free Report) has lost 1% in the past month while gold mining ETF VanEck Vectors Gold Miners ETF (GDX - Free Report) is off more than 6%.
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 >>