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Top ETF Areas of Last Week

Sanghamitra Saha

The past week was an eventful one with the signing of the U.S.-China phase-one trade deal, upbeat earnings releases, mixed U.S. economic data points and U.S. indexes reaching new highs. The S&P 500 crossed the 3,300-mark for the first time last week while small caps staged greater momentum (read: S&P 500 Up 1000 Points in a Month: 10 Stocks Boosted the ETF).

The S&P 500-based ETF SPDR S&P 500 ETF Trust SPY added 1.9%, Dow-Jones based DIA added 1.8% and the Nasdaq-100-based fund QQQ jumped 2.3% last week. Small-cap fund IWM advanced more than 2.5% (per xtf.com)

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

Marijuana

Cannabis stocks were beaten down badly in 2019 due to earnings weakness and “longer-than-anticipated product rollouts and overly enthusiastic forward estimates.” However, the trend seems to be reversing this year with a greater legislative push to legalize recreational marijuana. New Jersey is likely to arrange for a vote for recreational pot legalization in November. Since the market potential and demand for recreational marijuana is greater than medical marijuana, pot stocks rallied in 2020 (read: Cannabis ETFs Are Soaring in 2020: Will the Trend Continue?).

Additionally, an improving retail scenario in Canada or the legalization of Cannabis 2.0, or next-generation cannabis products should favor the industry. The huge 2019 selloffs corrected the exorbitant valuation of the cannabis stocks too. Global X Cannabis ETF POTX,The Cannabis ETF THCX and Amplify Seymour Cannabis ETF CNBS were the top marijuana ETF gainers that advanced in the range of 14.5% to 19.8% past week (as of Jan 17, 2019) (read: What's Ahead for Marijuana ETFs After a Dismal Show in 2019?).

Palladium

After a surge in 2019, palladium price momentum is showing no sign of a slowdown in 2020. The rally has mainly been backed by growing global demand and stagnating supply. “There are few well-established palladium mines” while demand has been on the rise on increased consumption of gasoline engines. Stringent emission control norms have been fueling demand for Palladium-using petrol-fueled cars as governments around the world look to fight climate change. Aberdeen Standard Physical Palladium Shares ETF PALL added 16.6% last week (read: 5 ETF Areas Up At Least 45% in 2019).

Cocoa

Strengthening global demand for cocoa has been pushing prices higher. Dry and sandy winds from Sahara lowered beneficial rains in West Africa and in turn weighed on the crop yields from Ghana and Ivory Coast — two of the top global producers.iPath Bloomberg Cocoa Subindex Total Return(SM) ETN NIB added 8.7% past week.

Lithium

With constant automation and technological breakthroughs, a fast pickup in autonomous vehicles is in the cards.Elon Musk’s Tesla’s (TSLA) solid growth momentum and amazing one-year stock performance supports the fact. The company delivered approximately 367,500 vehicles last year, marking a notable jump of 50% jump from 2018. Global electric vehicle sales rose to an all-time high of 1.2 million units sold between January and October 2019. Since lithium-ion batteries are used to power electric cars, Global X Lithium & Battery Tech ETF LIT tacked on 8.4% gains last week (read: Electric Vehicles to Rev Up in 2020: Play These ETFs (Revised)).

China Technology

The signing of the U.S.-China phase-one trade deal, easy money policy in China and beefed-up fiscal stimulus are driving China ETFs. Among them, technology ETF Global X MSCI China Information Technology ETF CHIK was in the sweet spot (read: After a Solid 2019, 5 China ETFs to Keep Rallying in 2020).

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Click to get this free report SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports Global X Lithium & Battery Tech ETF (LIT): ETF Research Reports Aberdeen Standard Physical Palladium Shares ETF (PALL): ETF Research Reports iPath Bloomberg Cocoa Subindex Total Return ETN (NIB): ETF Research Reports Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports Global X MSCI China Information Technology ETF (CHIK): ETF Research Reports Amplify Seymour Cannabis ETF (CNBS): ETF Research Reports Global X Cannabis ETF (POTX): ETF Research Reports The Cannabis ETF (THCX): ETF Research Reports 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