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U.S. stocks shot up on Monday as a coronavirus vaccine being developed by Moderna (MRNA - Free Report) made progress. According to the company, the vaccine produced Covid-19 antibodies in all 45 participants. Plus, economic reopening boosted oil prices on cues of expected higher demand.
Not only Moderna, there have been other developments too. Last week, Novavax, Inc.’s (NVAX) shares skyrocketed after it announced that Coalition for Epidemic Preparedness Innovations will invest up to $384 million in the development and production of NVX-CoV2373, Novavax's vaccine candidate against coronavirus (read: Moderna Soars: Biotech ETFs In Focus).
Although the Fed chairman cautioned that the current downturn “may last until late 2021,” he added that the U.S. economy could "easily" contract by 30% in the second quarter. However, he expressed confidence that the economy would recover over the long term.
The Fed also indicated that the central bank is not out of ammunition after a massive policy stimulus and that it can expand existing programs or add new ones, if needed. Meanwhile, Congress has already passed about $3 trillion in rescue funds and is planning to launch more.
The University of Michigan’s U.S. consumer sentiment index came in at 73.7 for May, up from 71.8 in April and way higher than the Dow Jones estimate of 65. “The CARES relief checks improved consumers’ finances and widespread price discounting boosted their buying attitudes,” per an economist. U.S. single-family homebuilders’ confidence also rose in May.
Agreed, corporate earnings may see the largest decline since 2009 (per Wall Street Journal), but investors appear less bothered about the decline as they are betting big on monetary and fiscal stimulus.
Momentum ETFs to Buy
Against this backdrop, investors can consider high momentum stocks and ETFs for profits. Momentum investing might be intriguing to those seeking higher returns in a short spell. It looks to reflect profits from buying stocks that are sizzling on the market.
This ETF seeks to track the performance of large- and mid-cap U.S. stocks exhibiting relatively higher momentum characteristics.
VictoryShares USAA MSCI USA Value Momentum ETF (ULVM - Free Report)
The fund is designed to deliver exposure to equity securities of large and mid-capitalization U.S. issuers that have higher exposure to value and momentum factors, while maintaining moderate turnover and lower realized volatility than traditional capitalization weighted indexes.
Image: Bigstock
High Momentum ETFs to Tap Now
U.S. stocks shot up on Monday as a coronavirus vaccine being developed by Moderna (MRNA - Free Report) made progress. According to the company, the vaccine produced Covid-19 antibodies in all 45 participants. Plus, economic reopening boosted oil prices on cues of expected higher demand.
Not only Moderna, there have been other developments too. Last week, Novavax, Inc.’s (NVAX) shares skyrocketed after it announced that Coalition for Epidemic Preparedness Innovations will invest up to $384 million in the development and production of NVX-CoV2373, Novavax's vaccine candidate against coronavirus (read: Moderna Soars: Biotech ETFs In Focus).
Although the Fed chairman cautioned that the current downturn “may last until late 2021,” he added that the U.S. economy could "easily" contract by 30% in the second quarter. However, he expressed confidence that the economy would recover over the long term.
The Fed also indicated that the central bank is not out of ammunition after a massive policy stimulus and that it can expand existing programs or add new ones, if needed. Meanwhile, Congress has already passed about $3 trillion in rescue funds and is planning to launch more.
The University of Michigan’s U.S. consumer sentiment index came in at 73.7 for May, up from 71.8 in April and way higher than the Dow Jones estimate of 65. “The CARES relief checks improved consumers’ finances and widespread price discounting boosted their buying attitudes,” per an economist. U.S. single-family homebuilders’ confidence also rose in May.
Agreed, corporate earnings may see the largest decline since 2009 (per Wall Street Journal), but investors appear less bothered about the decline as they are betting big on monetary and fiscal stimulus.
Momentum ETFs to Buy
Against this backdrop, investors can consider high momentum stocks and ETFs for profits. Momentum investing might be intriguing to those seeking higher returns in a short spell. It looks to reflect profits from buying stocks that are sizzling on the market.
ETF Picks
Fidelity Momentum Factor ETF (FDMO - Free Report)
The Fidelity U.S. Momentum Factor Index reflects the performance of stocks of large and mid-capitalization domestic companies signaling momentum.
iShares Edge MSCI USA Momentum Factor ETF (MTUM - Free Report)
This ETF seeks to track the performance of large- and mid-cap U.S. stocks exhibiting relatively higher momentum characteristics.
VictoryShares USAA MSCI USA Value Momentum ETF (ULVM - Free Report)
The fund is designed to deliver exposure to equity securities of large and mid-capitalization U.S. issuers that have higher exposure to value and momentum factors, while maintaining moderate turnover and lower realized volatility than traditional capitalization weighted indexes.
Invesco S&P MidCap Momentum ETF (XMMO - Free Report)
The fund is composed of securities with strong growth characteristics selected from the Russell Midcap Index.
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