We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The July upsurge in the key U.S. indexes wavered to start August as stocks slipped mainly on renewed U.S.-China trade tension. Also, the Fed’s less-hawkish guidance on monetary policy released at July-end triggered a broader market rout to start August (read: Fed & Trade Trigger Market Bloodbath: 6 Hot Inverse ETF Areas).
The month was all about announcement of higher import tariffs between the two superpowers. China levied a round of retaliatory tariffs on U.S. goods worth $75 billion in the range of 5% to 10%, which is set to be enacted on Sep 1. The move by China came after the U.S. government announced on Aug 1 that it is levying a 10% tariff to $300 billion worth of Chinese goods. Though Washington delayed some of those tariffs on Aug 13, saying they will be enacted in two tranches, on Sep 1 and Dec 15, the announcement prompted China to counteract.
After markets closed in the United States on Aug 23, Trump said, “he would raise tariffs on $250 billion in Chinese exports to 30% from 25% in October, and that the tariffs kicking in next week will now be 15%, rather than 10%.” The first lot of those tariffs will be introduced in September (read: Consumer ETFs in Focus on Fresh Tariff Threats).
Apart from trade tensions, the month saw a host of global stimulus from various central banks and a bond market rally. Overall, the global stock markets remained edgy. SPDR S&P 500 ETF (SPY - Free Report) (down 4.2%), SPDR Dow Jones Industrial Average ETF (DIA - Free Report) (down 4.3%) and Invesco QQQ Trust (QQQ - Free Report) (down 4.9%) — all lost heavily in the past month (as of Aug 28, 2019).
Against this backdrop, below we highlight a few winning and losing ETF areas of the month.
Toppers
Volatility
Hostility in terms of tariff caused a bloodbath in Wall Street and volatility levels spiked. VelocityShares 1x Long VSTOXX Futures ETNEVIX (up 32.6%), iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) (up 32.5%), ProShares VIX Short-Term Futures ETF (VIXY - Free Report) (up 32.4%) and VelocityShares VIX Short-Term ETN (up 32.3%) were the toppers (read: Volatility ETFs Jump on Fresh Trade Tensions & Growth Worries).
U.S. Treasury
Thanks to the market turmoil and the safe-haven rally, yields on the 10-year U.S. treasuries fell drastically in the month. As of Aug 28, the benchmark yield was 1.47%, down from 1.90% seen at the start of the month. This has led to a spike in the long-term bond prices and ETFs like PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (ZROZ - Free Report) (up 20.2%) and Vanguard Extended Duration Treasury Index Fund ETF SharesEDV (up 17.9%) benefited greatly.
Precious Metal Miners
Since tariff-related moves and countermoves have shaken the investment world, investors sought safety in the safe-haven asset gold. Also, several global central banks cut rates in recent times, which favored the non-interest-bearing assets like precious metals. Needless to say, the precious metal rally boosted gold and silver-mining ETFs like iShares MSCI Global Gold Miners ETF (RING - Free Report) (up 14.2%) and ETFMG Prime Junior Silver ETFSILJ) (up 13.2%) (read: Precious Metal ETFs Gain From Tit-for-Tat Tariff Action).
Losers
Energy
Global growth worries weighed on the demand outlook of oil prices. United States Oil Fund, LP (USO - Free Report) was down 1.5% in the past month. Also, U.S. oil rig count fell to the near two-year low, per Baker Hughes data. Market watchers are of the view that “shale producers are cutting back in a bid to conserve capital,” which means “less drilling and fracking work for top oilfield services providers.” SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) and iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) lost about 22.3% each in the past month.
Steel Producer
VanEck Vectors Steel ETF (SLX - Free Report) lost about 19.3% in the past month. The underlying NYSE Arca Steel Index tracks the overall performance of companies involved in the steel sector. Per a Citigroup analyst, “benefits from the Trump administration’s tariffs on foreign steel imports have diminished and demand has been disappointing,” as quoted on Bloomberg.
Copper Miner
U.S.-China trade tensions have been playing foul on the demand for copper. This is because China is a huge consumer of copper. Any slowdown in China could disrupt the copper-producing industry.Global X Copper Miners ETF (COPX) lost 18.6% in the past month.
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 >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Top and Flop ETF Areas of August
The July upsurge in the key U.S. indexes wavered to start August as stocks slipped mainly on renewed U.S.-China trade tension. Also, the Fed’s less-hawkish guidance on monetary policy released at July-end triggered a broader market rout to start August (read: Fed & Trade Trigger Market Bloodbath: 6 Hot Inverse ETF Areas).
The month was all about announcement of higher import tariffs between the two superpowers. China levied a round of retaliatory tariffs on U.S. goods worth $75 billion in the range of 5% to 10%, which is set to be enacted on Sep 1. The move by China came after the U.S. government announced on Aug 1 that it is levying a 10% tariff to $300 billion worth of Chinese goods. Though Washington delayed some of those tariffs on Aug 13, saying they will be enacted in two tranches, on Sep 1 and Dec 15, the announcement prompted China to counteract.
After markets closed in the United States on Aug 23, Trump said, “he would raise tariffs on $250 billion in Chinese exports to 30% from 25% in October, and that the tariffs kicking in next week will now be 15%, rather than 10%.” The first lot of those tariffs will be introduced in September (read: Consumer ETFs in Focus on Fresh Tariff Threats).
Apart from trade tensions, the month saw a host of global stimulus from various central banks and a bond market rally. Overall, the global stock markets remained edgy. SPDR S&P 500 ETF (SPY - Free Report) (down 4.2%), SPDR Dow Jones Industrial Average ETF (DIA - Free Report) (down 4.3%) and Invesco QQQ Trust (QQQ - Free Report) (down 4.9%) — all lost heavily in the past month (as of Aug 28, 2019).
Against this backdrop, below we highlight a few winning and losing ETF areas of the month.
Toppers
Volatility
Hostility in terms of tariff caused a bloodbath in Wall Street and volatility levels spiked. VelocityShares 1x Long VSTOXX Futures ETN EVIX (up 32.6%), iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX - Free Report) (up 32.5%), ProShares VIX Short-Term Futures ETF (VIXY - Free Report) (up 32.4%) and VelocityShares VIX Short-Term ETN (up 32.3%) were the toppers (read: Volatility ETFs Jump on Fresh Trade Tensions & Growth Worries).
U.S. Treasury
Thanks to the market turmoil and the safe-haven rally, yields on the 10-year U.S. treasuries fell drastically in the month. As of Aug 28, the benchmark yield was 1.47%, down from 1.90% seen at the start of the month. This has led to a spike in the long-term bond prices and ETFs like PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (ZROZ - Free Report) (up 20.2%) and Vanguard Extended Duration Treasury Index Fund ETF Shares EDV (up 17.9%) benefited greatly.
Precious Metal Miners
Since tariff-related moves and countermoves have shaken the investment world, investors sought safety in the safe-haven asset gold. Also, several global central banks cut rates in recent times, which favored the non-interest-bearing assets like precious metals. Needless to say, the precious metal rally boosted gold and silver-mining ETFs like iShares MSCI Global Gold Miners ETF (RING - Free Report) (up 14.2%) and ETFMG Prime Junior Silver ETF SILJ) (up 13.2%) (read: Precious Metal ETFs Gain From Tit-for-Tat Tariff Action).
Losers
Energy
Global growth worries weighed on the demand outlook of oil prices. United States Oil Fund, LP (USO - Free Report) was down 1.5% in the past month. Also, U.S. oil rig count fell to the near two-year low, per Baker Hughes data. Market watchers are of the view that “shale producers are cutting back in a bid to conserve capital,” which means “less drilling and fracking work for top oilfield services providers.” SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) and iShares U.S. Oil Equipment & Services ETF (IEZ - Free Report) lost about 22.3% each in the past month.
Steel Producer
VanEck Vectors Steel ETF (SLX - Free Report) lost about 19.3% in the past month. The underlying NYSE Arca Steel Index tracks the overall performance of companies involved in the steel sector. Per a Citigroup analyst, “benefits from the Trump administration’s tariffs on foreign steel imports have diminished and demand has been disappointing,” as quoted on Bloomberg.
Copper Miner
U.S.-China trade tensions have been playing foul on the demand for copper. This is because China is a huge consumer of copper. Any slowdown in China could disrupt the copper-producing industry.Global X Copper Miners ETF (COPX) lost 18.6% in the past month.
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 >>