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3 Top Sector ETFs of Last Week

Sanghamitra Saha

Last week was a decent one for Wall Street with the S&P 500, the Dow Jones and the Nasdaq adding 0.3% to 0.6%. Notably, the S&P 500 and the Nasdaq are near their 52-week high levels. Investors should note that majority of last week’s market movement was based on Q3 earnings releases, U.S.-China trade optimism, oil price rally and chances of policy easing in the Fed’s October meeting.

Against this backdrop, we highlight a few winning sector ETFs.

Energy

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures closed at their highest levels since Sep 24 last week. WTI crude ETF United States Oil Fund LP USO and United States Brent Oil Fund LP BNO advanced about 4.5% and 4.1%, respectively, in the past five days (as of Oct 25, 2019).

A surprise cut in U.S. stockpiles and chances that OPEC and its allies will prolong their output cuts in order to stabilize prices led to this rally. The resultant gainers of the oil rally were energy ETFs like First Trust Energy AlphaDEX Fund FXN, Invesco Dynamic Energy Exploration & Production ETF PXE, iShares U.S. Oil Equipment & Services ETF IEZ, SPDR S&P Oil & Gas Exploration & Production ETF XOP, iShares U.S. Oil & Gas Exploration & Production ETF IEO and VanEck Vectors Oil Services ETF OIH. These funds added in the range of 6% to 7.2% last week (as of Oct 25, 2019).

Semiconductor

Last week has been a volatile one for the semiconductor space. At the start of the week, semiconductor stocks declined on Texas Instrument’s TSX weak fourth-quarter revenue forecast. However, things turned around with Intel Corporation’s INTC upbeat earnings. Intel’s stock jumped 8.1% on Oct 25. The company beat on both the lines and hiked its fiscal 2019 guidance. First Trust Nasdaq Semiconductor ETF FTXL added 6.2% in the week (read: Time to Buy the Dip in Semiconductor ETFs?).

Investors should note that the semiconductor space may gain from the 5G boom, smartphone market growth, greater consumer spending on technology, rebounding PC shipments, signs of an improvement to the U.S.-China trade relation. Last but not the least, the upcoming holiday season can also be instrumental in driving the semiconductor space higher as there is a tendency to buy tech devices in Black Friday and Cyber Monday deals.

Online Retail

The retail space started getting prepared for a shorter holiday shopping season this year.Investors should note that “2019 is the shortest possible holiday calendar scenario,” with six fewer days between Thanksgiving and Christmas than in 2018. To make up for it, Walmart WMT is “launching online deals earlier than ever before.”

Investors must have noticed the trend of gradual rise in online shopping. Though online sales still occupy a less-significant portion of the total U.S. retail sales, the space is growing fast, courtesy of increased usage of smartphones and other mobile Internet devices.

The latest news is that the biggest U.S. mall owner, Simon Property Group SPG, is collaborating with online shopping site Rue La La’s parent company to come up with a new website that would offer people deals. This clearly explains the 5.8% jump in Amplify Online Retail ETF IBUY (read: Is the Retail Picture Truly Gloomy? ETFs in Focus).

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First Trust Energy AlphaDEX Fund (FXN): ETF Research Reports
 
iShares U.S. Oil & Gas Exploration & Production ETF (IEO): ETF Research Reports
 
United States Brent Oil Fund LP (BNO): ETF Research Reports
 
SPDR S&P Oil & Gas Exploration & Production ETF (XOP): ETF Research Reports
 
iShares U.S. Oil Equipment & Services ETF (IEZ): ETF Research Reports
 
United States Oil Fund, LP (USO): ETF Research Reports
 
Amplify Online Retail ETF (IBUY): ETF Research Reports
 
First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports
 
Invesco Dynamic Energy Exploration & Production ETF (PXE): ETF Research Reports
 
VanEck Vectors Oil Services ETF (OIH): ETF Research Reports
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
 
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