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.
Dow Jones ETFs to Soar Further After Best Quarter Since 1987?
Read MoreHide Full Article
It has mostly been noticed that Dow Jones appear to be the most vulnerable index to the socio-economic changes among the big three — S&P 500, the Nasdaq, the Dow Jones. Be it U.S.-China trade war, oil price volatility or the coronavirus pandemic, the Dow suffers the most.
No wonder, this key U.S. index lagged its two bigger counterparts amid the pandemic-led selloff in early 2020. But as unprecedented stimulus measures by global central banks and governments triggered a market rally, Dow Jones swiftly logged its best quarter since 1987 in Q2.
That’s not all. Below we highlight a few reasons that say the Dow Jones has more room to run.
Boeing Relief in the Cards?
In May, Dow’s key holding Boeing (BA - Free Report) has resumed production of the 737 Max, which was shelved following fatal accidents. Boeing also started a series of long-delayed flight tests of its redesigned 737 MAX with the U.S. aviation regulator this week. The long-awaited certification test flights boosted Boeing’s shares materially at June-end. It looks like cloud over Boeing’s business appears to clear.
Pandemic-Disrupted Industries to Be Treated Specially?
Treasury Secretary Steven Mnuchin said on Jun 30 that any further fiscal relief to businesses would be “targeted to specific industries” most disturbed by the pandemic. Mnuchin added that hopefully the bill to repurpose Paycheck Protection Program (PPP) funds will be through by the end of July, when key measures provided by the original legislation are set to expire. Since, the index endured the most amid the pandemic, such special benefits toward laggards should boost the key equity gauge.
Oil Rally
Furthermore, it has been noticed that Dow Jones shares a deep relationship with oil price movement. Though the energy sector rally spreads optimism over the broader market as a whole, in most cases, on a particular day of oil surge, the rise in the Dow Jones is steeper than that of the S&P 500, or vice versa.
Oil prices lately made a comeback post the OPEC+ deal on output cut extension. Plus, the latest API data of depleting U.S. crude inventories has favored oil. The American Petroleum Institute (API) estimated a major draw in crude oil inventories of 8.156 million barrels (biggest this year) for the week ending Jun 26.
The economic reopening trade should also favor oil prices to some extent. Overall, on the oil front, the Dow Jones index does have a reason to cheer.
Focus on Blue-Chip Stocks
The Dow Jones assigns greater weight to higher-priced stocks, which is one of the reasons behind the recent surge. Overall, blue chip stocks have been performing nicely of late. Also, large-cap stocks have substantial foreign exposure and thus perform better in a weaker dollar environment — like what we are likely to witness thanks to a super-dovish Fed. Now, since the Dow Jones is a price-weighted index, bullishness over this high-priced large-cap cohort has made the case for the Dow investing more appealing.
ETFs in Focus
Therefore, investors seeking a momentum play, can bet on SPDR Dow Jones Industrial Average ETF (DIA - Free Report) , Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) and iShares Dow Jones US ETF (IYY - Free Report) . Investors can also settle for leveraged Dow ETF plays as long as the trend favors them. Here, ProShares Ultra Dow30 (DDM - Free Report) and ProShares UltraPro Dow30 (UDOW - Free Report) are a couple of choices.
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
Dow Jones ETFs to Soar Further After Best Quarter Since 1987?
It has mostly been noticed that Dow Jones appear to be the most vulnerable index to the socio-economic changes among the big three — S&P 500, the Nasdaq, the Dow Jones. Be it U.S.-China trade war, oil price volatility or the coronavirus pandemic, the Dow suffers the most.
No wonder, this key U.S. index lagged its two bigger counterparts amid the pandemic-led selloff in early 2020. But as unprecedented stimulus measures by global central banks and governments triggered a market rally, Dow Jones swiftly logged its best quarter since 1987 in Q2.
That’s not all. Below we highlight a few reasons that say the Dow Jones has more room to run.
Boeing Relief in the Cards?
In May, Dow’s key holding Boeing (BA - Free Report) has resumed production of the 737 Max, which was shelved following fatal accidents. Boeing also started a series of long-delayed flight tests of its redesigned 737 MAX with the U.S. aviation regulator this week. The long-awaited certification test flights boosted Boeing’s shares materially at June-end. It looks like cloud over Boeing’s business appears to clear.
Pandemic-Disrupted Industries to Be Treated Specially?
Treasury Secretary Steven Mnuchin said on Jun 30 that any further fiscal relief to businesses would be “targeted to specific industries” most disturbed by the pandemic. Mnuchin added that hopefully the bill to repurpose Paycheck Protection Program (PPP) funds will be through by the end of July, when key measures provided by the original legislation are set to expire. Since, the index endured the most amid the pandemic, such special benefits toward laggards should boost the key equity gauge.
Oil Rally
Furthermore, it has been noticed that Dow Jones shares a deep relationship with oil price movement. Though the energy sector rally spreads optimism over the broader market as a whole, in most cases, on a particular day of oil surge, the rise in the Dow Jones is steeper than that of the S&P 500, or vice versa.
Oil prices lately made a comeback post the OPEC+ deal on output cut extension. Plus, the latest API data of depleting U.S. crude inventories has favored oil. The American Petroleum Institute (API) estimated a major draw in crude oil inventories of 8.156 million barrels (biggest this year) for the week ending Jun 26.
The economic reopening trade should also favor oil prices to some extent. Overall, on the oil front, the Dow Jones index does have a reason to cheer.
Focus on Blue-Chip Stocks
The Dow Jones assigns greater weight to higher-priced stocks, which is one of the reasons behind the recent surge. Overall, blue chip stocks have been performing nicely of late. Also, large-cap stocks have substantial foreign exposure and thus perform better in a weaker dollar environment — like what we are likely to witness thanks to a super-dovish Fed. Now, since the Dow Jones is a price-weighted index, bullishness over this high-priced large-cap cohort has made the case for the Dow investing more appealing.
ETFs in Focus
Therefore, investors seeking a momentum play, can bet on SPDR Dow Jones Industrial Average ETF (DIA - Free Report) , Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) and iShares Dow Jones US ETF (IYY - Free Report) . Investors can also settle for leveraged Dow ETF plays as long as the trend favors them. Here, ProShares Ultra Dow30 (DDM - Free Report) and ProShares UltraPro Dow30 (UDOW - Free Report) are a couple of choices.
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 >>