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The Zacks Analyst Blog Highlights XLK, SMH, FTEC, IGV and IXN
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For Immediate Release
Chicago, IL – November 3, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Technology Select Sector SPDR Fund (XLK - Free Report) , VanEck Semiconductor ETF (SMH - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) , iShares Expanded Tech-Software Sector ETF (IGV - Free Report) and iShares Global Tech ETF (IXN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Fed Stays Put: 5 Winning ETF Picks
As expected, the Federal Reserve announced on Wednesday that it would keep its benchmark interest rate within the range of 5.25% to 5.50%. This marks the highest interest rate level in over two decades. However, the central bank has left the door open for potential future actions as it continues to grapple with the persistent challenge of reining in inflation and steering the economy toward its target of 2% inflation.
In response to the Fed's decision, Treasury yields edged lower, with the 10-year yield trading falling to 4.77% from 4.88% recorded on the day before. As the Fed stayed put and yields fell, high growth sectors like technology that outperform in a low-rate environment, gained.
Upgrading the Economic Assessment
In its official statement, the Fed upgraded its assessment of the United States economy for the third quarter of 2023, moving from describing it as "solid" in September to now characterizing it as "strong." This shift in language reflects the recent surge in economic activity that has caught the attention of policymakers and analysts alike. Notably, the U.S. economy grew at an annualized rate of 4.9% in Q3 (read: Consumer Spending Boosts U.S. Q3 GDP: ETFs to Buy).
The U.S. central bank noted that job gains have "moderated" compared to their previous assessment, where they indicated that job growth had "slowed" during the period between meetings. Despite this moderation, job gains are still considered robust, and the unemployment rate remains at historically low levels. However, the statement emphasized that inflation continues to pose a concern and remains elevated.
Changing Bets on Future Rate Hikes
Market dynamics regarding future rate hikes saw a notable shift following the Fed's announcement. According to the CME FedWatch Tool, investors have now priced in a 67.3% likelihood that the Federal Reserve will keep rates steady through its January meeting. This reflects a substantial increase from the 59.3% probability observed just a day prior. Plus, there is 75% chance of the Fed keeping rates the same in the December meeting, up from 68.9% likelihood recorded on Oct 31, 2023.
Winning Tech ETFs
Chances of rates falling from the highs have impacted key tech ETFs positively on Nov 1, 2023. Against this backdrop, below we highlight a few tech ETFs that have surged on Nov 1, 2023.
Technology Select Sector SPDR Fund
The fund puts about 47% weights in Apple and Microsoft. The fund charges 10 bps in fees. The ETF XLK advanced about 1.9% on Nov 1, 2023 while it gained about 0.3% after hours.
VanEck Semiconductor ETF
The fund is heavy on Nvidia (21.58%), followed by Taiwan Semiconductor (TSM). The fund SMH, which charges 35 bps in fees, gained 2.5% on Nov 1, 2023 and added about 0.9% after hours.
Fidelity MSCI Information Technology Index ETF
This fund is also heavy on Apple (21.80%) and Microsoft (20.70%). The fund charges 8 bps in fees. The fund edged higher by 1.7% and advanced more than 1.6% after hours.
iShares Expanded Tech-Software Sector ETF
This fund is heavy on Microsoft (8.69%), Adobe (8.30%) and Salesforce (8.12%). The fund charges 41 bps in fees. The fund inched up 0.8% and added about 0.3% after hours.
iShares Global Tech ETF
The top holdings of the fund are Apple (21.24%), Microsoft (19.77%) and Nvidia (4.52%). The fund charges 41 bps in fees. The fund edged higher by 1.8% and advanced about 0.02% after hours.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights XLK, SMH, FTEC, IGV and IXN
For Immediate Release
Chicago, IL – November 3, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Technology Select Sector SPDR Fund (XLK - Free Report) , VanEck Semiconductor ETF (SMH - Free Report) , Fidelity MSCI Information Technology Index ETF (FTEC - Free Report) , iShares Expanded Tech-Software Sector ETF (IGV - Free Report) and iShares Global Tech ETF (IXN - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Fed Stays Put: 5 Winning ETF Picks
As expected, the Federal Reserve announced on Wednesday that it would keep its benchmark interest rate within the range of 5.25% to 5.50%. This marks the highest interest rate level in over two decades. However, the central bank has left the door open for potential future actions as it continues to grapple with the persistent challenge of reining in inflation and steering the economy toward its target of 2% inflation.
In response to the Fed's decision, Treasury yields edged lower, with the 10-year yield trading falling to 4.77% from 4.88% recorded on the day before. As the Fed stayed put and yields fell, high growth sectors like technology that outperform in a low-rate environment, gained.
Upgrading the Economic Assessment
In its official statement, the Fed upgraded its assessment of the United States economy for the third quarter of 2023, moving from describing it as "solid" in September to now characterizing it as "strong." This shift in language reflects the recent surge in economic activity that has caught the attention of policymakers and analysts alike. Notably, the U.S. economy grew at an annualized rate of 4.9% in Q3 (read: Consumer Spending Boosts U.S. Q3 GDP: ETFs to Buy).
The U.S. central bank noted that job gains have "moderated" compared to their previous assessment, where they indicated that job growth had "slowed" during the period between meetings. Despite this moderation, job gains are still considered robust, and the unemployment rate remains at historically low levels. However, the statement emphasized that inflation continues to pose a concern and remains elevated.
Changing Bets on Future Rate Hikes
Market dynamics regarding future rate hikes saw a notable shift following the Fed's announcement. According to the CME FedWatch Tool, investors have now priced in a 67.3% likelihood that the Federal Reserve will keep rates steady through its January meeting. This reflects a substantial increase from the 59.3% probability observed just a day prior. Plus, there is 75% chance of the Fed keeping rates the same in the December meeting, up from 68.9% likelihood recorded on Oct 31, 2023.
Winning Tech ETFs
Chances of rates falling from the highs have impacted key tech ETFs positively on Nov 1, 2023. Against this backdrop, below we highlight a few tech ETFs that have surged on Nov 1, 2023.
Technology Select Sector SPDR Fund
The fund puts about 47% weights in Apple and Microsoft. The fund charges 10 bps in fees. The ETF XLK advanced about 1.9% on Nov 1, 2023 while it gained about 0.3% after hours.
VanEck Semiconductor ETF
The fund is heavy on Nvidia (21.58%), followed by Taiwan Semiconductor (TSM). The fund SMH, which charges 35 bps in fees, gained 2.5% on Nov 1, 2023 and added about 0.9% after hours.
Fidelity MSCI Information Technology Index ETF
This fund is also heavy on Apple (21.80%) and Microsoft (20.70%). The fund charges 8 bps in fees. The fund edged higher by 1.7% and advanced more than 1.6% after hours.
iShares Expanded Tech-Software Sector ETF
This fund is heavy on Microsoft (8.69%), Adobe (8.30%) and Salesforce (8.12%). The fund charges 41 bps in fees. The fund inched up 0.8% and added about 0.3% after hours.
iShares Global Tech ETF
The top holdings of the fund are Apple (21.24%), Microsoft (19.77%) and Nvidia (4.52%). The fund charges 41 bps in fees. The fund edged higher by 1.8% and advanced about 0.02% after hours.
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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 >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.