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Wall Street delivered an upbeat performance last week, with the Dow Jones logging the best week since July. The other two key indexes — the S&P 500 and the Nasdaq — rocked between gains and losses in the week. Overall, the S&P 500 was up 2.5%, the Dow Jones added 1.4%, the Nasdaq Composite advanced 3.3% and the Russell 2000 was up about 3.6%.
The latest U.S. nonfarm payrolls report released on Friday showed August payrolls grew at a faster-than-expected pace, with 187,000 jobs being added. However, job numbers first reported for June and July were revised down by a combined 110,000.
In an evidence of a slowing economy and easing pricing pressures, average hourly earnings increased 4.3% on a year-over-year basis, less than the 4.4% increase expected by economists polled by Dow Jones, as quoted on CNBC. The unemployment rate ticked up to 3.8% in August, reaching its highest level in more than a year. Economists had expected it to remain at 3.5%.
The central bank’s preferred inflation gauge showed prices rose 0.2% in July, the same as in June. Core PCE, which bars volatile food and energy prices, also rose 0.2% month over month and 4.2% year over year, a slight uptick on a sequential basis.
Benchmark U.S. treasury yield ended the week at 4.18%, while hitting a high of 4.20% at the start of the week and a low of 4.09% on Aug 31. Against this backdrop, we highlight a few winning ETF areas of last week.
AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) – Up 38.9%
Marijuana stocks surged following a proposal by the Drug Enforcement Agency (“DEA”) to reclassify cannabis as a substance with reduced risk, fueling anticipation of federal legalization. The news has spread huge optimism of a Federal-level legalization across the marijuana industry , with shares of several cannabis companies, including Canopy Growth, Tilray Brands and Cronos Group skyrocketing (read: Cannabis ETFs Soar on Hopes of Federal Legalization).
Carbon Offset
KraneShares Global Carbon Offset Strategy ETF – Up 13.2%
The race to cut back on carbon usage among global superpowers has boosted the fund. The U.S. Inflation Reduction Act includes a record $369 billion to slash carbon emissions by 40% over the next decade. Europe and China are also on the same path. EV uptake is growing. Hence, the fund that provides broad coverage of the voluntary carbon market by tracking carbon offset futures contracts, gained substantially last week.
China
Global X MSCI China Real Estate ETF – Up 9%
China’s stocks struggled a lot in August. However, fiscal and monetary stimulus to shore up the ailing economy and, most importantly, the struggling real estate sector gave a boost to China ETFs last week (read: Time to Buy the Dip in China ETFs?)
Crypto
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 7.8%
One of the most significant developments in 2023 for the Bitcoin ecosystem was the legal victory in the U.S. Court of Appeals for the D.C. Circuit, involving Grayscale and the U.S. Securities and Exchange Commission (SEC). The court sided with Grayscale last week in its lawsuit against the SEC's denial of the company's application to convert the Grayscale Bitcoin Trust into an ETF.
This decision is not only a win for Grayscale but also sets an example that could impact other companies seeking to launch Bitcoin ETFs, including industry giants like BlackRock and Fidelity (read: 5 Favorable Events Bitcoin Had in 2023: ETFs in Focus).
Meme Stocks
Roundhill MEME ETF – Up 7.5%
The underlying Solactive Roundhill Meme Stock Index consists of 25 equal-weighted U.S.-listed equity securities that exhibit a combination of elevated social media activity and high short interest. While the fund got a beating most of August, cheaper valuation and the return of risk-on sentiments favored shares of the struggling companies that commonly emerge as meme stocks (read: Top & Flop ETFs of August).
Image: Bigstock
Best ETF Areas of Last Week
Wall Street delivered an upbeat performance last week, with the Dow Jones logging the best week since July. The other two key indexes — the S&P 500 and the Nasdaq — rocked between gains and losses in the week. Overall, the S&P 500 was up 2.5%, the Dow Jones added 1.4%, the Nasdaq Composite advanced 3.3% and the Russell 2000 was up about 3.6%.
The latest U.S. nonfarm payrolls report released on Friday showed August payrolls grew at a faster-than-expected pace, with 187,000 jobs being added. However, job numbers first reported for June and July were revised down by a combined 110,000.
In an evidence of a slowing economy and easing pricing pressures, average hourly earnings increased 4.3% on a year-over-year basis, less than the 4.4% increase expected by economists polled by Dow Jones, as quoted on CNBC. The unemployment rate ticked up to 3.8% in August, reaching its highest level in more than a year. Economists had expected it to remain at 3.5%.
The central bank’s preferred inflation gauge showed prices rose 0.2% in July, the same as in June. Core PCE, which bars volatile food and energy prices, also rose 0.2% month over month and 4.2% year over year, a slight uptick on a sequential basis.
Chinese stocks continued to reel under pressure and they fell after data showed manufacturing activity dropped for six months in a row in August. European equities rose after reports showed Euro-area core inflation slowed, raising hopes that the European Central Bank will hold interest rates steady next month.
Benchmark U.S. treasury yield ended the week at 4.18%, while hitting a high of 4.20% at the start of the week and a low of 4.09% on Aug 31. Against this backdrop, we highlight a few winning ETF areas of last week.
Marijuana
Roundhill Cannabis ETF (WEED - Free Report) – Up 41.7%
AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) – Up 38.9%
Marijuana stocks surged following a proposal by the Drug Enforcement Agency (“DEA”) to reclassify cannabis as a substance with reduced risk, fueling anticipation of federal legalization. The news has spread huge optimism of a Federal-level legalization across the marijuana industry , with shares of several cannabis companies, including Canopy Growth, Tilray Brands and Cronos Group skyrocketing (read: Cannabis ETFs Soar on Hopes of Federal Legalization).
Carbon Offset
KraneShares Global Carbon Offset Strategy ETF – Up 13.2%
The race to cut back on carbon usage among global superpowers has boosted the fund. The U.S. Inflation Reduction Act includes a record $369 billion to slash carbon emissions by 40% over the next decade. Europe and China are also on the same path. EV uptake is growing. Hence, the fund that provides broad coverage of the voluntary carbon market by tracking carbon offset futures contracts, gained substantially last week.
China
Global X MSCI China Real Estate ETF – Up 9%
China’s stocks struggled a lot in August. However, fiscal and monetary stimulus to shore up the ailing economy and, most importantly, the struggling real estate sector gave a boost to China ETFs last week (read: Time to Buy the Dip in China ETFs?)
Crypto
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 7.8%
One of the most significant developments in 2023 for the Bitcoin ecosystem was the legal victory in the U.S. Court of Appeals for the D.C. Circuit, involving Grayscale and the U.S. Securities and Exchange Commission (SEC). The court sided with Grayscale last week in its lawsuit against the SEC's denial of the company's application to convert the Grayscale Bitcoin Trust into an ETF.
This decision is not only a win for Grayscale but also sets an example that could impact other companies seeking to launch Bitcoin ETFs, including industry giants like BlackRock and Fidelity (read: 5 Favorable Events Bitcoin Had in 2023: ETFs in Focus).
Meme Stocks
Roundhill MEME ETF – Up 7.5%
The underlying Solactive Roundhill Meme Stock Index consists of 25 equal-weighted U.S.-listed equity securities that exhibit a combination of elevated social media activity and high short interest. While the fund got a beating most of August, cheaper valuation and the return of risk-on sentiments favored shares of the struggling companies that commonly emerge as meme stocks (read: Top & Flop ETFs of August).