Last week saw sustained momentum in the market with stocks extending their push into the record territory. Meanwhile, the CBOE Volatility Index, often referred to as the market’s fear gauge, touched an all-time low on Oct 5, indicating a protracted period of market calm.
Though the first monthly drop in September payrolls in seven years put an end to the eight-day winning streak of repeated records for the S&P 500 — longest streak of records in 20 years — and the seven-day winning streak for the Dow Jones, both extended their weekly gains for the fourth week. The Nasdaq Composite Index also notched its second weekly gain.
Rounds of upbeat economic data drove the solid performance. Manufacturing activity, as measured by the Institute for Supply Management, reached a 13-year high in September while non-manufacturing activity or the service sector expanded to the highest level since August 2005. Additionally, auto sales strongly rebounded in September posting the best month of the year, following the eighth consecutive month of decline.
Further, renewed hopes of tax cuts by the end of the year led to increased optimism. Trump has proposed the biggest U.S. tax overhaul in three decades. Adding to the strength is solid expectation for Q3 earnings. Per Zacks, total Q3 earnings for the S&P 500 index are expected to be up 2.3% from the same period last year and up 10.6% for the small-cap S&P 600 index.
On the other hand, increased prospects for rate hikes in December lifted the 10-year Treasury yields to the highest level in three months and thus dampened the appeal for Treasury bonds.
Given this, several ETFs saw a huge spike in the week while a few were laggards. Below, we have highlighted some of them:
Best ETFs
Global X Copper Miners ETF (COPX – Free Report) – Up 5.5%
Copper logged its largest weekly gain since late August on hopes of stronger demand from top consumer China, though a rise in dollar capped some gains. COPX is the only ETF offering global access to a broad range of copper mining companies. It tracks the Solactive Global Copper Miners Total Return Index and holds 28 stocks in its basket with heavy concentration on the top firm at 7.7%. Other firms hold no more than 5.5% share. Canadian firms take the largest share at 27%, while United Kingdom and China also receive a double-digit exposure each. The product has managed $59 million in AUM while charges 65 bps in fees per year. It trades in a light volume of 47,000 shares a day on average.
