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Stocks closed out the day in positive territory on Friday, registering the best week of the year for major indexes, per a Yahoo Finance article. The S&P 500 has advanced 3.9% last week, the Dow Jones has recorded 2.9% and the Nasdaq Composite is up 2.9%. After a significant rally on Thursday, the S&P 500 and the tech-heavy Nasdaq Composite managed to recover from earlier losses in August.
Consumer Sentiment and Data
The rally was mainly aided by two data: monthly retail sales and Walmart's (WMT - Free Report) latest earnings report. These reports indicated that recession fears stemming from the stock market's early August drop might be overblown. Walmart's CFO indicated that the consistent consumer behavior throughout the second quarter, noting no major slump in July.
Retail sales in the United States inched up 1% sequentially in July 2024, following a downwardly revised 0.2% drop in June and way better than forecasts of a 0.3% gain. It is the biggest increase since January 2023, with sales at motor vehicle and part dealers rising the most (3.6%), followed by sales at electronics and appliance stores (1.6%) (read: Retail Sales Gains in July: ETFs & Stocks to Play).
The Consumer Price Index (CPI) showed its lowest year-over-year increase since early 2021, allowing the S&P 500 and Nasdaq to recover losses from earlier in the month (read: Momentum ETFs to Play as Wall Street Rallies?).
Federal Reserve Rate Cuts
In light of the positive economic data, investor expectations regarding Fed rate cuts have moderated. Current data from the CME Group shows a 66% chance of a 0.25% rate cut by the Fed next month, with a 33% probability for a 0.50% cut. This goes against the earlier market speculation for a larger rate reduction.
Best ETFs to Play
Against this backdrop, below we highlight a few winning ETFs of last week.
The Solactive Junior Gold Miners Custom Factors Index aims to track the performance of small-capitalization gold companies whose stocks are listed on regulated exchanges. The fund charges 50 bps in fees and yields 3.81% annually.
Strive U.S. Semiconductor ETF (SHOC - Free Report) – Up 11.0%
The underlying Solactive United States Semiconductors 30 Capped Index measures the performance of the largest thirty U.S. companies in the U.S. semiconductor sector. The fund charges 40 bps in fees.
The underlying Solactive Global Gold Explorers & Developers Total Return Index is a free float-adjusted, liquidity-tested and market capitalization-weighted index that is designed to measure broad-based equity market performance of global companies involved in gold exploration. The fund charges 65 bps in fees.
Amplify U.S. Alternative Harvest ETF (MJUS) – Up 10.3%
The Amplify U.S. Alternative Harvest ETF is an actively managed ETF that seeks long-term growth of capital by primarily investing in securities of companies engaged in the Cannabis Business in the United States. The fund charges 75 bps in fees and yields 3.44% annually.
The underlying Nasdaq Metals Focus Silver Miners Index tracks the performance of the equity securities of silver companies, subject to the market capitalization screen. The fund charges 69 bps in fees.
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Stocks Log Best Week of the Year: Winning ETFs
Stocks closed out the day in positive territory on Friday, registering the best week of the year for major indexes, per a Yahoo Finance article. The S&P 500 has advanced 3.9% last week, the Dow Jones has recorded 2.9% and the Nasdaq Composite is up 2.9%. After a significant rally on Thursday, the S&P 500 and the tech-heavy Nasdaq Composite managed to recover from earlier losses in August.
Consumer Sentiment and Data
The rally was mainly aided by two data: monthly retail sales and Walmart's (WMT - Free Report) latest earnings report. These reports indicated that recession fears stemming from the stock market's early August drop might be overblown. Walmart's CFO indicated that the consistent consumer behavior throughout the second quarter, noting no major slump in July.
Retail sales in the United States inched up 1% sequentially in July 2024, following a downwardly revised 0.2% drop in June and way better than forecasts of a 0.3% gain. It is the biggest increase since January 2023, with sales at motor vehicle and part dealers rising the most (3.6%), followed by sales at electronics and appliance stores (1.6%) (read: Retail Sales Gains in July: ETFs & Stocks to Play).
The Consumer Price Index (CPI) showed its lowest year-over-year increase since early 2021, allowing the S&P 500 and Nasdaq to recover losses from earlier in the month (read: Momentum ETFs to Play as Wall Street Rallies?).
Federal Reserve Rate Cuts
In light of the positive economic data, investor expectations regarding Fed rate cuts have moderated. Current data from the CME Group shows a 66% chance of a 0.25% rate cut by the Fed next month, with a 33% probability for a 0.50% cut. This goes against the earlier market speculation for a larger rate reduction.
Best ETFs to Play
Against this backdrop, below we highlight a few winning ETFs of last week.
Sprott Junior Gold Miners ETF (SGDJ - Free Report) – Up 12.7%
The Solactive Junior Gold Miners Custom Factors Index aims to track the performance of small-capitalization gold companies whose stocks are listed on regulated exchanges. The fund charges 50 bps in fees and yields 3.81% annually.
Strive U.S. Semiconductor ETF (SHOC - Free Report) – Up 11.0%
The underlying Solactive United States Semiconductors 30 Capped Index measures the performance of the largest thirty U.S. companies in the U.S. semiconductor sector. The fund charges 40 bps in fees.
Global X Gold Explorers ETF (GOEX - Free Report) – Up 10.9%
The underlying Solactive Global Gold Explorers & Developers Total Return Index is a free float-adjusted, liquidity-tested and market capitalization-weighted index that is designed to measure broad-based equity market performance of global companies involved in gold exploration. The fund charges 65 bps in fees.
Amplify U.S. Alternative Harvest ETF (MJUS) – Up 10.3%
The Amplify U.S. Alternative Harvest ETF is an actively managed ETF that seeks long-term growth of capital by primarily investing in securities of companies engaged in the Cannabis Business in the United States. The fund charges 75 bps in fees and yields 3.44% annually.
Amplify Junior Silver Miners ETF (SILJ - Free Report) – Up 10%
The underlying Nasdaq Metals Focus Silver Miners Index tracks the performance of the equity securities of silver companies, subject to the market capitalization screen. The fund charges 69 bps in fees.