The Wall Street was upbeat last month on trade optimism, moderate earnings and a strong start to the holiday season despite subdued consumer confidence data. SPDR S&P 500 ETF Trust (SPY - Free Report) added 3.3% in the month and SPDR Dow Jones Industrial Average ETF Trust (DIA - Free Report) andInvesco QQQ Trust (QQQ - Free Report) jumped 4.1% each (read: What Soft Confidence? 3 ETFs & Stocks for Solid Holiday Buying).
Against this backdrop, we highlight the key ETF events of last month.
Wall Street at All-Time High
U.S. stocks have been rallying since the news of the phase-one U.S.-China trade deal emerged in October. The rally picked up in November on President Trump’s announcement that the U.S. and Chinese negotiators were "close" to a "phase one" trade deal. The key U.S. equity indexes hit fresh records multiple times in the month. SPY hit a high of $315.48 at month-end while QQQ hit a high of $206.05 on Nov 27.
Ebb and Flow of Trade Tensions
The month was all about the ebb and flow of U.S.-China trade tensions. While on one hand, Trump called the initial level of a trade deal close, the U.S. President signed a bill in support of Hong Kong protesters which undermined China’s interests. As a result, all trade-sensitive securities saw some volatility in the month. Overall, iShares China Large-Cap ETF (FXI - Free Report) has lost about 3.7% in the past month (as of Dec 2, 2019).
Not all was dicey on the trade front. Another trade negotiation hogged investors’ attention — the United States-Mexico-Canada (USMCA) deal. Speaker Nancy Pelosi said on Nov 25 that the deal is ‘within range’ and House Democrats and the Trump administration have resolved their issues on the USMCA but a final review is still to be done(read: USMCA Trade Deal 'Within Range': ETFs to Benefit).
This puts focus on Mexico and Canada ETFs like iShares MSCI Mexico Capped ETF (EWW - Free Report) and iShares MSCI Canada ETF (EWC - Free Report) .
Healthcare Sector Tops
FDA approvals, solid merger-acquisition environment and positive drug data have made the healthcare sector a star performer in November. Virtus LifeSci Biotech Clinical Trials ETF (BBC - Free Report) and iShares U.S. Healthcare Providers ETF (IHF - Free Report) are some of the top performers in the space (read: Healthcare Sector Outperforming: 5 Best ETFs & Stocks QTD).
Online Shopping on the Rise
A six-day shorter holiday shopping season this year led retailers to come up with deals earlier than usual, which drove the retail sales numbers in November. Online sales for Thanksgiving and Black Friday rose 17% year over year, according to Adobe Analytics. Black Friday online sales hit a record $7.4 billion this year. ProShares Online Retail ETF ONLN is a clear winner given the trend. Also, VanEck Vectors Retail ETF (RTH - Free Report) grabs attention as it has wide exposure to winning retail companies like Wal-Mart (WMT - Free Report) and Target (TGT - Free Report) .
Downbeat earnings dealt a blow to the marijuana space in November. However, amid an awful earnings scenario, the marijuana space turned around in mid-November on bill hopes. Shares of marijuana companies rose on Nov 21 after a U.S. congressional committee passed a legislation that would end the federal embargo on weed (read: Can Bill Hopes Relieve Earnings-Induced Pain in Pot ETFs?).
The latest bill will enact a 5% federal sales tax on marijuana products that are manufactured in or imported into the United States and obliterate past criminal records. Analysts are still doubtful about the near-term prospects of the space. The sponsors of the bill warned that the Senate was unlikely to approve it anytime soon.
Overall, marijuana ETFs like ETFMG Alternative Harvest ETF MJ, Global X Cannabis ETF POTX and Amplify Seymour Cannabis ETF CNBS lost about13.6%, 16.2% and 12%, respectively, in the past month.
Alibaba’s Grand Hong Kong Debut
Chinese e-commerce giant Alibaba Group (BABA - Free Report) made a blockbuster Hong Kong debut in late November, with the stock rising 7%. The company's “secondary listing could raise as much as $12.9 billion, making it the largest public offering so far this year.” Alibaba’s Hong Kong shares, trading under the stock code 9988, will be added to the Hang Seng Composite Index on Dec 9 (read: ETFs to Tap Alibaba's Stunning Hong Kong Debut).
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