4 Sector ETFs That Were Up About Double Digit on Monday
Global stocks staged a relief rally on Apr 6, as coronavirus cases slowed down a bit in some of the global hotspots like Italy and New York. SPDR Dow Jones Industrial Average ETF Trust DIA (up 7.5%), SPDR S&P 500 ETF Trust SPY (up 6.7%), Invesco QQQ Trust QQQ (up 7.2%), all-world ETF iShares MSCI ACWI ETF ACWI (up 6.2%), emerging market ETF iShares MSCI Emerging Markets ETF EEM (up 5.5%) and developed market ETF iShares MSCI EAFE ETF EFA (up 5.3%) — all rallied on Monday’s trading session.
Against this backdrop, below we highlight a few sector ETFs that staged nearly double-digit gains on Apr 6. This gives hints of investors’ likely future behavior toward the market in the post-virus economy.
Homebuilding
iShares U.S. Home Construction ETF ITB (up 13.9%) and SPDR S&P Homebuilders ETF XHB (up 12.6%) gained superbly on Apr 6 as the sector was battered by the latest coronavirus-induced selloff. Lower-than-expected decline in mortgage rates, likelihood of labor shortage, reduced wealth effect and the absence of the Spring selling season wreaked havoc on the sector in the past month.
ITB and XHB were down about 42% and 39%, respectively, in the past month. If coronavirus cases drop ahead, the Fed and government stimulus keep offering support and stock markets bounce back, housing ETFs are sure to make a comeback (read: What Fed Rate Cut? 5 Reasons Why Housing ETFs Are in Trouble).
Retail
SPDR S&P Retail ETF XRT added 11.1% on Apr 6. The broader retail sector has been a victim of lockdowns and temporary store closures. However, the fund XRT’s top 10-holdings segment is loaded with some stocks that are doing well in wake of the pandemic. These companies are providers of Internet-based postage services like Stamps.com Inc., online retail giant Amazon; grocery destinations like Grocery Outlet Holding Corp. and Walmart Inc.; low-priced retailers like Dollar General; online pet retailer Chewy and pet pharmacy PetMed Express. These stocks are emerging as pandemic-proof stocks and will be equally important even after the crisis (read: Coronavirus Hits Feb Retail Sales: Winning & Losing ETFs).
Semiconductor
iShares PHLX Semiconductor ETF SOXX added about 10.2% on Apr 6.The rising work-and-learn-from-home trend boosted the need for PCs, laptops and other kind of computer peripherals. The demand is soaring at both the commercial and retail levels. No wonder, such requirements will keep the semiconductor space as a hot bet.
Gold Mining
Though stocks surged on Apr 6, the rally does not have legs as the global coronavirus crisis will take time to fade. So, safe-haven demand for gold will remain strong, which in turn should boost gold mining activities. Several gold mines on the global level did not face lockdowns. Also, mining companies use oil as an input, which has seen a huge price slump of late. VanEck Vectors Junior Gold Miners ETF GDXJ added about 9.6% (slightly lower than 10%) on Apr 6 (read: ETFs at Risk as Oil Sees Worst Quarter on Record).
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SPDR S&P 500 ETF (SPY): ETF Research Reports
Invesco QQQ (QQQ): ETF Research Reports
iShares MSCI EAFE ETF (EFA): ETF Research Reports
SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
SPDR S&P Retail ETF (XRT): ETF Research Reports
iShares MSCI Emerging Markets ETF (EEM): ETF Research Reports
iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports
SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
iShares MSCI ACWI ETF (ACWI): ETF Research Reports
VanEck Vectors Junior Gold Miners ETF (GDXJ): ETF Research Reports
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