Yahoo Finance The Zacks Analyst Blog Highlights UK Alphadex Fund First Trust, GlobalX MSCI China Real Estate ETF, US Natural Gas Fund, Simplify Interest Rate Hedge ETF and Advocate Rising Rate Hedge ETF
For Immediate Release
Chicago, IL – December 13, 2022 – Zacks.com announces the list of stocks and ETFs 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: UK Alphadex Fund First Trust FKU, GlobalX MSCI China Real Estate ETF CHIR, US Natural Gas Fund UNG, Simplify Interest Rate Hedge ETF PFIX and Advocate Rising Rate Hedge ETF RRH.
Here are highlights from Monday’s Analyst Blog:
Top Performing ETFs of Last Week
Wall Street was downbeat last week, probably due to the relentless market forecasts of a looming recession and an uncertain Fed rate outlook. The S&P 500 Index was down 3.4%, the Dow Jones lost 2.8%, the Nasdaq declined 4% and the Russell 2000 was off 5.1%. Rising rate concerns were rife last week.
Goldman Sachs, Bank of America and JPMorgan predict a U.S. recession in 2023. "Inflation is eroding everything I just said and that a trillion and a half dollars will run out sometime midyear next year," I.P. Morgan CEO Dimon said, as quoted on investing.com.
Looking at the projections, the recession model calculated by the New York Fed estimates a 38% probability of a recession in the United States in November 2023 (readings above 30% are historically harbingers of an economic downturn). Per the Fed's latest dot plots, the terminal rate for 2023 is given as 4.6%, the investing.com article mentioned.
Traders expect the Fed to raise its benchmark lending rate in December by a smaller margin of half a percentage point. Yet, rising rate concerns took the markets into its grip last week due to concerns that the Fed may keep rates at the peak level for longer. This diminished hopes for Fed rate cuts in 2023.
As a result, though the benchmark treasury yield slumped on the second day of last week, it staged a rally in the final three days of last week from 3.42% to 3.57%. Notably, the latest bouts of economic data — hotter-than-expected ISM services and stronger jobs — made the matter worse as it cemented the fact that the U.S. economy is still on a decent footing.
Plus, the U.S. producer prices index (PPI) rose slightly more than expected in November amid a jump in the costs of services, according to a report from the U.S. Labor Department. This, in turn, reignited the speculation that the Fed may keep rates at an elevated level in the coming days to tame inflation. However, the ISM Manufacturing PMI declined to 49 in November 2022, pointing to the first contraction in factory activity since May 2020.
Meanwhile, oil prices logged the biggest weekly decline in months. Growing recession fears annulled any supply woes. U.S. West Texas Intermediate crude settled 44 cents lower at $71.02 a barrel, a new low for 2022. Brent crude settled 5 cents lower at $76.10 per barrel, per Reuters.
As rates rose at the end the week, growth sectors like technology and biotech dropped. Stock market volatility levels were high in the week. CBOE Volatility Index gained about 11% in the week due to the afore-mentioned uncertainty.
Against this backdrop, below, we highlight a few top-performing ETFs of last week.
ETFs in Focus
United Kingdom
UK Alphadex Fund First Trust – Up 9.7%
The U.K. government on Friday announced widespread reforms to financial regulationthat it says will refurbish EU laws that “choke off growth.” The fund FKU puts 26.32% weight in the financial sector. Hence, the announcement is beneficial for the fund.
China
GlobalX MSCI China Real Estate ETF – Up 6.9%
Chinese stocks recorded another week of big gains as economic reopening gained momentum and the outlook improved for the beleaguered property sector as more easing for the property sector is likely. Casino and property shares led the rally.
Natural Gas
US Natural Gas Fund – Up 5.5%
Natural gas markets recovered a bit last week on harsh weather that boosted the heating demand.
Rising Rates
Simplify Interest Rate Hedge ETF – Up 3.3%
Advocate Rising Rate Hedge ETF – Up 4.7%
As investors braced for higher rates, ETFs that give exposure to hedging of interest rates gained solidly.
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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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First Trust United Kingdom AlphaDEX ETF (FKU): ETF Research Reports
United States Natural Gas ETF (UNG): ETF Research Reports
Global X MSCI China Real Estate ETF (CHIR): ETF Research Reports
Simplify Interest Rate Hedge ETF (PFIX): ETF Research Reports
Advocate Rising Rate Hedge ETF (RRH): ETF Research Reports
