Top-performing ETF Areas of Last Week
Wall Street was upbeat last week. Each of the key equity gadgets — the S&P 500 (up 1.5%), the Dow Jones (up 2%), the Nasdaq Composite (up 0.7%) and the Russell 2000 (up 2.3%) — gained last week. While the beginning of the week was marked by a bear-market rally, Wall Street faltered in the middle of the week on higher oil prices and chances of further steep Fed rate hike due to upbeat jobs data.
Oil prices increased considerably on Oct 5 as OPEC+ producers agreed deep output cuts, seeking to spur a recovery in crude prices despite repeated calls from U.S. President Joe Biden’s administration for the group to pump more to lower fuel prices and contain global inflation (read: Oil ETFs Up on Steep OPEC+ Output Cuts).
The U.S. economy added 263,000 jobs in September 2022, the least since April of 2021 but higher than market forecasts of 250,000, per tradingeconomics. The reading indicated a decline from an average of 439K in the first eight months of the year, as high inflation and interest rates started to weigh on the economy.
Still, the number hints at a tight labor market with employment about 500,000 higher than its pre-pandemic level. Unemployment rate dropped to 3.5%. Economists expected unemployment to hold at 3.7%, per consensus estimates compiled by Bloomberg, quoted on Yahoo Finance.
The benchmark U.S. treasury yield jumped to 3.89% on Oct 7, 2022 from 3.67% at the start of the week. Yield dropped to 3.62% in the middle of the week. Against this backdrop, below we highlight a few ETF areas that fetched the best returns.
Cannabis
Advisorshares Pure US Cannabis ETF MSOS – Up 32.4%
Advisorshares Poseidon Dynamic Cannabis ETF PSDN – Up 28.8%
Listed Funds Trust Roundhill Cannabis ETF (WEED) – Up 25.2%
Shares in cannabis companies traded in an extremely volatile manner last week, resulting in steeper-than-normal ups and downs. Most cannabis stocks jumped after U.S. President Joe Biden sent his first of a thread of tweets about work he was going to do related to cannabis.
President Biden announced pardons for cannabis convictions. The prospects for the passage of SAFE banking had increased following the announcement. However, shares could not hold on to the gains as they slumped to close out the week.
Oil & Energy
US Oil Equipment & Services iShares ETF IEZ – Up 17.9%
Vaneck Oil Services ETF OIH – Up 17.1%
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided to cut production targets by about two million barrels per day from November. Energy analysts had mostly expected the group to cut output in the range of 500,000 barrels and two million barrels, as quoted on CNBC. The announcement led to a rise in oil and energy ETFs last week.
Inverse Tesla
Vaneck Oil Services ETF TSLQ – Up 17.4%
Direxion Daily Tesla Bear 1X Shares TSLS – Up 17.3%
Graniteshares 1X Short Tesla Daily ETF (TSLI) – Up 17.1%
Tesla stock had its worst week since March 2020. Tesla delivered 343,830 electric vehicles in the third quarter, missing analysts’ expectations of 359,162 deliveries, according to Refinitiv, as quoted on Business Standard. A year earlier Tesla delivered 241,300 units. Logistics challenges were held responsible for this miss (read: Should You Buy Tesla-Heavy ETFs Despite Weak Q3 Deliveries?).
Plus, CEO Elon Musk had asked to halt the upcoming Delaware court trial on Twitter buyout. Judge delayed a looming trial between Twitter and Elon Musk, giving the Tesla CEO more time to close his $44 billion buyout deal after months of flight to get out of it. Tesla slumped 12.3% last week, offering gains to the inverse Tesla ETFs.
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iShares U.S. Oil Equipment & Services ETF (IEZ): ETF Research Reports
VanEck Oil Services ETF (OIH): ETF Research Reports
AdvisorShares Pure US Cannabis ETF (MSOS): ETF Research Reports
AdvisorShares Poseidon Dynamic Cannabis ETF (PSDN): ETF Research Reports
AXS TSLA Bear Daily ETF (TSLQ): ETF Research Reports
Direxion Daily TSLA Bear 1X Shares (TSLS): ETF Research Reports
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