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Best-Performing ETF Areas of Last Week

·3-min read

Wall Street staged a rally last week with the S&P 500, the Dow Jones, the Nasdaq Composite and the Russell 2000 adding 4.3%, 3%, 4.7% and 4.3%, respectively. Some upbeat earnings and expectations of slower Federal Reserve monetary tightening boosted markets.

Investors’ hope that slowing inflation and slowing growth may keep the Fed to ease plans to push up interest rates boosted equities. Though the Fed hiked rates by 75 bps last week, the Fed indicated that the pace of rate hikes would likely be slower in the coming days.

The Fed’s July move marked four consecutive rate hikes in the U.S. this year. Short-term borrowing rates are now between 2.25% and 2.50%, comparable to levels in 2019 (read: Fed Hikes Rates by 0.75%: ETFs to Win).

"Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures," the Fed indicated, as quoted on Yahoo Finance. Big earnings from the likes of Apple and Amazon came in favorable. Some earnings from the European market too came in upbeat.

Against this backdrop, below we highlight a few ETF areas that offered stellar returns last week.

ETFs in Focus

Clean Energy

Invesco Solar ETF TAN – Up 18.9%

SPDR S&P Kensho Clean Power ETF CNRG – Up 16.2%

Clean-energy shares jumped in July as Sen. Joe Manchin agreed to favor a roughly $370 billion climate and energy spending package that would include tax credits for electric vehicles, renewable energy projects and clean hydrogen, per a Wall Street Journal article. Solar and hydrogen stocks that are seen as particularly sensitive to changes in tax credits and incentives gained materially.

Oil & Energy

SPDR S&P Oil & Gas Equipment & Services ETF XES – Up 18.7%

Invesco S&P SmallCap Energy ETF PSCE – Up 17.8%

First Trust Natural Gas ETF (FCG) – Up 11.4%

Oil prices gained last week as hopes about OPEC+ supply boost faded, per Reuters. Analysts said it would be tough for OPEC+ to increase supply as many producers are already struggling to meet output quotas. Stronger stock markets as well as a weaker greenback supported commodities like oil.

Brazil

iShares MSCI Brazil ETF EWZ – Up 11.4%

The Ibovespa stock index logged a 4.3% weekly gain, thanks to commodity stocks; upbeat macroeconomic data and strong corporate earnings. Domestic unemployment in Brazil for the three months leading to June dropped to 9.3% to their lowest since 2015, beating estimates and strengthening recent bets that the central bank may extend the Selic rate beyond the current level of 13.25%, per tradingeconomics.

Silver Mining

ETFMG Prime Junior Silver Miners ETF SILJ – Up 11.2%

As the Fed indicated to go slow on policy tightening front, demand for gold and silver increased. This is because a less hawkish Fed means moderate strength in the greenback. This in turn boosts the prices of metals like gold and silver. Since mining companies act as leveraged plays of the underlying metal, SILX gained strength.

Soybean

Teucrium Soybean Fund SOYB – Up 11%

Likelihood of higher demand from China has boosted soybean prices last week. A decline in tariffs could help bolster more soybean purchases, thus boosting demand and then prices, as quoted on etfdb.com.


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Invesco Solar ETF (TAN): ETF Research Reports
 
iShares MSCI Brazil ETF (EWZ): ETF Research Reports
 
SPDR S&P Oil & Gas Equipment & Services ETF (XES): ETF Research Reports
 
Teucrium Soybean ETF (SOYB): ETF Research Reports
 
Invesco S&P SmallCap Energy ETF (PSCE): ETF Research Reports
 
ETFMG Prime Junior Silver Miners ETF (SILJ): ETF Research Reports
 
SPDR S&P Kensho Clean Power ETF (CNRG): ETF Research Reports
 
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