At the midway through the fourth quarter, stocks across the globe are stuck in a nasty web of woes. Higher interest rates in the United States, political malaise in Europe, trade woes and threats of global slowdown have created tensions in the equity world. Oil slipping into the bear territory has led to further caution among investors.  

In fact, these events pushed the Nasdaq Composite index and S&P 500 index into correction territory at the end of October.

However, a slew of strong earnings, rounds of upbeat economic data and holiday fervor helped to revitalize investors’ sentiment to some extent. This is especially true as the American economy has been on a solid pace of growth with robust job creation, strong GDP growth, a 50-year low unemployment rate, the fastest pace of wage gains in nearly a decade, and rising consumer and business confidence. While third-quarter GDP growth slowed to 3.5% from 4.2% in the second quarter amid mounting headwinds from trade, it marks the best two-quarter stretch in four years. With this, the economy is on pace for the fastest annual growth in 13 years.

Meanwhile, Q3 earnings for 91.2% of the S&P 500 members that have reported results are up 26.2% from the same period last year on 8.8% higher revenues, with 78.5% beating EPS estimates and 63.6% beating revenue estimates. This is better than the earnings growth from this group of companies in other recent periods though revenue growth represents a deceleration from the recent past.

Given this, we have highlighted both the best and worst performing zones and their ETFs at halfway Q4:

Best Zones

Volatility

Volatility roared back in the final quarter with volatility products being the outperformers at the half-way mark. In particular, ProShares VIX Short-Term Futures ETF (VIXY – Free Report) has surged nearly 25% so far this quarter. It seeks to profit from increases in the expected volatility of the S&P 500, as measured by the prices of VIX futures contracts. The ETF focuses on the S&P 500 VIX Short-Term Futures Index, which measures the returns of a portfolio of monthly VIX futures contracts with a weighted average of one month to expiration. It has amassed $110.7 million in AUM and charges 85 bps in fees per year. The fund trades in average daily volume of 2 million shares.