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The Zacks Analyst Blog Highlights: IShares MSCI ACWI, SPDR S&P Bank ETF, VanEck Vectors Junior Gold Miners ETF, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio ETF And Guggenheim S&P 500 Equal Weight ETF
By Zacks Investment ResearchStock MarketsSep 01, 2016 09:30PM ET
www.investing.com/analysis/the-zacks-analyst-blog-highlights:-ishares-msci-acwi,-spdr-s-p-bank-etf,-vaneck-vectors-junior-gold-miners-etf,-powershares-ftse-rafi-us-1500-small-mid-portfolio-etf-and-guggenheim-s-p-500-equal-weight-etf-200151611
The Zacks Analyst Blog Highlights: IShares MSCI ACWI, SPDR S&P Bank ETF, VanEck Vectors Junior Gold Miners ETF, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio ETF And Guggenheim S&P 500 Equal Weight ETF
By Zacks Investment Research | Sep 01, 2016 09:30PM ET For Immediate Release
Chicago, IL – September 02, 2016 – 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. Stocks recently featured in the blog include iShares MSCI ACWI (ACWI), SPDR S&P Bank ETF (KBE), VanEck Vectors Junior Gold Miners ETF (NYSE:GDX) (GDXJ), PowerShares FTSE RAFI US 1500 Small-Mid Portfolio ETF (PRFZ) and Guggenheim S&P 500 Equal Weight ETF (RSP).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Thursday’s Analyst Blog:
Top ETF Stories of August
The month of August was lukewarm for U.S. equities. Pushing aside the highly exaggerated (probably) Brexit blues at June end, the global market seemed to have returned to its normal course. The S&P 500-based (SPY (NYSE:SPY)) added 0.2%, Dow Jones Industrial Average-based (DIA) ticked up 0.04% and Nasdaq-100-based (QQQ) tacked on over 0.5% gains.
The all-world ETF iShares MSCI ACWI (ACWI) added about 0.7%, Europe ETF Vanguard FTSE Europe ETF (VGK) notched 1.8% gains while the emerging market ETF iShares MSCI Emerging Markets (EEM) added 1.1% in the month.
Let’s delve a little deeper into the events mainly caused such market movements and are worth watching in the next month.
Renewed Fed Hike Bets
Investors were busy discussing the timeline of the Fed rate hike throughout the month. Fed chief Janet Yellen indicated that the U.S. economy is moving slowly toward the central bank’s targets , which in turn bolstered chances of a Fed rate hike in the coming days. Yellen also noted that “while economic growth has not been rapid, it has been sufficient to generate further improvement in the labor market.”
Investors should note that several Fed officials have been advocating a September or a sooner-than-expected rate hike over the last few days. With this, PowerShares DB US Dollar Bullish ETF (NYSE:UUP) gained momentum at the end of the month and finished August with 0.3% returns (read : ETF Winners & Losers Post Jackson Hole Meet ).
Finance & Tech Stocks Win
As soon as rate hike hearsay took center stage, financial stocks started flying. This segment performs better in a rising rate environment. Also, better-than-second-quarter results from some of the sector biggies played an important role in boosting the sector in recent times. Bank ETFs includingSPDR S&P Bank ETF (KBE) andSPDR S&P Regional Banking ETF (KRE) added about over 8% in the month (read: Guide to the 7 Most Popular Financial ETFs ).
Another soaring sector in the month was technology, a beneficiary of better-than-expected earnings and return of risk-on sentiments to the market.SPDR S&P Technology Hardware ETF (XTH) and Social Media Index ETF (SOCL) added about 11.1% and 7.5% in the market, respectively.
Oil: Bear to Bull in a Month
The most amazing thing happened with the commodity oil, which saw both bear and bull markets in August. In early August, oil reeled at the $40 level and slid to the bear territory due to the supply glut. However, within a few days, oil sprung to a bull market, having witnessed a 20% rise from the latest low. Hopes of output freeze talks in an informal meeting among Saudi Arabia, Russia and the other major producers in Algeria this month actually fueled the price of oil. United States Oil (NYSE:USO) added about 6.2% and United States Brent Oil (BNO)advanced about 7.5% in the month (read: Oil ETFs Soar on Positive News: Will the Rally Last? )
Miners Peter Out
It’s common knowledge that the prospect of a rising greenback is not good news of commodity investing as commodities are linked to the U.S. dollar. So, most of the precious metals including gold and silver slump in the month. Thanks to this trend, mining ETFs also did not fare well.
Apart from the greenback issue, profit booking activity might have played a role in the sell-off of mining ETFs. Mining ETFs witnessed an astounding rally this year, with VanEck Vectors Junior Gold Miners ETF (GDXJ) ,PowerShares Global Gold and Precious Metals Portfolio ETF (PSAU) and PureFunds ISE Junior Silver ETF (SILJ) adding about 117.4%, 85.4% and 211.3%, respectively (as of August 31, 2016).
After scaling this height, a sell-off seems natural in a security, especially when the underlying operating backdrop for the fund is unfavorable. GDXJ, PSAU and SILJ were down in the range of 15% to 17% in August.
Small-Caps in Favor
With U.S. job, retail and manufacturing data coming in decent-to-upbeat lately, many became sure of the underlying strength in the economy. Meanwhile, U.S. consumer confidence grew to an 11-month high in August while consumer spending in the second quarter jumped 4.4% from the year-ago level, rising at a fastest rate since the last quarter of 2014 (read: 4 ETFs to Gain from Healthy Consumer Spending ).
All the optimism ruled out the slight tick-down in the “second estimate” of Q2 GDP. And small-cap stocks beat larger ones as they better reflect the uptick in an economy. PowerShares FTSE RAFI US 1500 Small-Mid Portfolio ETF (PRFZ) added about 4.6% in August while Guggenheim S&P 500 Equal Weight ETF (RSP) gained about 1%.
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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.
ISHRS-MSCI ACWI (ACWI): ETF Research Reports
SPDR-KBW BANK (KBE): ETF Research Reports
VANECK-JR GOLD (GDXJ): ETF Research Reports
PWRSH-F/R US150 (PRFZ): ETF Research Reports
GUGG-SP5 EQ ETF (RSP): ETF Research Reports
Original post
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The Zacks Analyst Blog Highlights: IShares MSCI ACWI, SPDR S&P Bank ETF, VanEck Vectors Junior Gold Miners ETF, PowerShares FTSE RAFI US 1500 Small-Mid Portfolio ETF And Guggenheim S&P 500 Equal Weight ETF
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