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The Zacks Analyst Blog Highlights: PowerShares DB US Dollar Bullish ETF, WisdomTree Japan Hedged SmallCap Equity ETF, CurrencyShares Japanese Yen ETF, Guggenheim S&P SmallCap 600 Pure Growth ETF and VanEck Vectors BDC Income

For Immediate Release

Chicago, IL – August 30, 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 PowerShares DB US Dollar Bullish ETF (UUP),WisdomTree Japan Hedged SmallCap Equity ETF (DXJS),CurrencyShares Japanese Yen ETF (FXY),Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG) and VanEck Vectors BDC Income (BIZD).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Monday’s Analyst Blog:

ETF Winners & Losers Post Jackson Hole Meet

The closely watched central bankers’ meeting at Jackson Hole did not reveal much about the timing of the next Fed rate hike. But 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.”

A solid job market is already present and the economy is also getting closer to ‘stable prices ,’ – the dual strength made the Fed confident about the economy. Investors should note that several Fed officials have been advocating a September or a sooner-than-expected rate hike over the last few days. Following the Jackson Hole meeting, the market started pricing in the odds of a 25 bps hike in September (read: 3 ETF Ways to Win if the Fed Acts in September ).

But Fed officials also stressed on the fact that they will require new measures going forward, including raising the inflation target or buying non-government-backed assets like corporate debt. After all, the U.S. economy is still slow with less-than-earlier-recorded growth in Q2. The growth rate as calculated now is 1.1% compared with the previously reported 1.2%. So, some accommodative economic tools are still needed.

It’s common knowledge that the Fed’s moves are data-driven. So all eyes have now shifted from Jackson Hole to job data to be released on September 2. If the numbers come out sturdy enough like last month, then the Fed may really take an action before the November presidential election. This is because things may turn dicey post-election (read: Hawkish Fed Vice Chairman Adds Strength to These ETFs ).

Market’s View

Futures markets bet on a 30% chance of a hike in the September 20–21 meeting. Goldman Sachs raised its bet on a September hike from 30% to 40% following the meeting. The bond market also gave similar cues. The yield on the 10-year U.S. Treasury note jumped to 1.62% on August 26 from 1.58% recorded the day earlier while yield on the two-year U.S. Treasury note spiked to 0.84% on August 26 from 0.78% the prior day (read: Treasury Bond ETFs in Focus on Rising Rate Hike Prospects ).

ETF Beneficiaries

The U.S. dollar ETF PowerShares DB US Dollar Bullish ETF (UUP) became a winner post Jackson Hole and added about 0.8% on August 26.

Currency-hedged Japan ETF WisdomTree Japan Hedged SmallCap Equity ETF (DXJS) advanced over 0.9% on August 26 as yen dropped. Notably, CurrencyShares Japanese Yen ETF (FXY) shed over 1.2% on the same day.

With the economy on the mend and the U.S. dollar strengthening, small-cap growth ETFs like Guggenheim S&P SmallCap 600 Pure Growth ETF (RZG) found reasons for advancement. RZG was up about 0.5% on August 26.

Business Development Companies ETF, VanEck Vectors BDC Income (BIZD), added about 0.4% on the day. The fund offers a benchmark-beating yield of about 8.67% annually. Moreover, these BDCs loan out to small- and mid-sized companies at relatively higher rates and often grab debt or equity stakes in those companies. These attributes make BDCs winners in the current investing backdrop.

ETF Losers

Utility ETF Utilities Select Sector SPDR ETF dived about 2.1% on August 26 as the sector is rate sensitive in nature and underperforms in a rising rate scenario.

Dividend ETF iShares Select Dividend ETF lost over 0.8% on reviving Fed hike bets as this segment falls out of investors’ favor in a rising rate scenario. This is because, safer investing options such as government bonds start yielding higher. This in turn dulls the lure for high dividend stocks.

Vanguard Short-Term Government Bond ETF lost about 0.1% on a steep rise in short-term bond yields.

iShares MSCI Emerging Markets retreated about 0.9% on August 26 on fear of a cease in cheap dollar inflows.

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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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PWRSH-DB US$ BU (UUP): ETF Research Reports
 
WISDMTR-JP HSCF (DXJS): ETF Research Reports
 
CRYSHS-JAP YEN (FXY): ETF Research Reports
 
GUGG-SP 600 PG (RZG): ETF Research Reports
 
VANECK-BDC INC (BIZD): ETF Research Reports
 
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