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5 Winning ETF Areas of Last Week

Sanghamitra Saha

Last week was a mixed one for Wall Street with the S&P 500 and the Nasdaq adding a respective 1% and 1.2%, and the Dow Jones losing 0.3%. Investors should note that majority of last week’s market movement was based on Q2 earnings releases, volatility in the oil patch, talks of policy easing at the Fed and the ECB, and the U.S. government’s announcement of an antitrust probe into big tech names (read: Tech ETFs Brush Aside Antitrust-Led Slump to Hit Highs).

Against this backdrop, we highlight a few ETF areas that won last week.

Semiconductor

Semiconductor ETFs surged in the week with First Trust Nasdaq Semiconductor ETF FTXL, Invesco Dynamic Semiconductors ETF PSI, SPDR S&P Semiconductor ETF XSD and iShares PHLX Semiconductor ETF SOXX adding in the range of 4.6% to 5.8%.

Robust Q2 earnings and an upbeat guidance from Intel (INTC), the world’s largest chipmaker, mainly led to the surge. Also, U.S.-China trade talks are likely to recommence this week with tempered expectations of a resolution (read: Chip ETFs to Surge on Intel's Robust Q2 Results).

Social Media

Global X Social Media ETF SOCL also jumped on upbeat earnings from companies like Facebook FB and Twitter TWTR. Adjusted earnings of Facebook came in at $1.99, beating the Zacks Consensus Estimate of $1.90 and improving from the year-ago $1.75. Revenues rose 28% year over year to $16.89 billion and edged past the estimated $16.45 billion. Facebook takes the second spot in SOCL, making up for 10.9% of assets (read: Facebook Q2 Beat Put These ETFs in Focus).

Twitter reported earnings results on Jul 26 and the stock rallied about 9% in the key trading session. The company reported second-quarter 2019 non-GAAP earnings per share of $1.58, much higher than 17 cents reported in the year-ago quarter. Revenues increased 18% year over year to $841.4 million. Twitter holds the top spot in SOCL with about 11.79% exposure.

Banks

Though bets on a Fed rate cut this year is rife, investors reduced bets on a steep rate cut owing to the release of some upbeat economic data. Jobs, retail sales and new home sales data for the month of June were upbeat, which calls for a less aggressive rate cut by the Fed.

With several economies across the globe resorting to easy money policies, fears of global growth worries have ebbed a bit. Earnings from big banks have also been impressive this reporting season (read: Financial ETFs Caught Between Solid Earnings & Falling Yields).

As a result, some parts of the U.S. treasury yield curve have steepened a little. First Trust NASDAQ ABA Community Bank Index Fund QABA, Invesco KBW Bank ETF KBWB and SPDR S&P Regional Banking ETF KRE have added in the band of 4.1% to 3.8% in the past week.

IPO

The IPO area has been red hot this year. With the SEC deferring the completion of reviews due to the government shutdown, Q1 IPO activity slowed a bit only to register a sharp rebound in the later months. Biotech and tech unicorn IPOs have set the stage on fire. Beyond Meat Inc BYND, one of the star IPOs of this year, touched a new all-time high last week (read: IPO ETF Returns Double the S&P 500 in 1H: What Next?).

Online Retail

Sales from online and mail-order purchases advanced 1.7%, in line with May's gain. Along with solid prospects in the online retailing space, several top holdings of the fund Amplify Online Retail ETF (IBUY) added stellar gains last week. eBay also reported both bottom and top-line beats in mid July and issued a raised profit outlook. All these factors charged up online retail ETFs in the recent session. The fundadded about 3.2% in the past week (read: Retail ETFs to Ride on eBay Earnings: More Room to Run?).

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Click to get this free report Facebook, Inc. (FB) : Free Stock Analysis Report Twitter, Inc. (TWTR) : Free Stock Analysis Report SPDR S&P Semiconductor ETF (XSD): ETF Research Reports Invesco KBW Bank ETF (KBWB): ETF Research Reports SPDR S&P Regional Banking ETF (KRE): ETF Research Reports First Trust NASDAQ ABA Community Bank Index Fund (QABA): ETF Research Reports Global X Social Media ETF (SOCL): ETF Research Reports First Trust NASDAQ Semiconductor ETF (FTXL): ETF Research Reports iShares PHLX Semiconductor ETF (SOXX): ETF Research Reports Amplify Online Retail ETF (IBUY): ETF Research Reports Invesco Dynamic Semiconductors ETF (PSI): ETF Research Reports Beyond Meat, Inc. (BYND) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report