5 ETF Winners Of Coronavirus Pandemic

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It’s been a year since the World Health Organization declared COVID-19 a pandemic, which brought the economy to a standstill and led to a crash in the stock markets. Though the U.S. economy is far from pre-pandemic levels, it has shown solid improvement from the pandemic-led lows. Meanwhile, the stock market has strongly bounced back and reached new milestones.

The solid rebound came on the back of an unprecedented and continued stimulus from the central bank and the government, progress on more coronavirus vaccines, and faster vaccine deployment. The combination of all these factors led to pent-up demand, resulting in higher demand for all types of products and services in the economy.

Additionally, the Fed has pledged to maintain its accommodative stance and will continue to buy $120 billion in Treasury and mortgage-backed securities per month. A low interest rate bodes well for the stocks as it pushes up economic activities and results in higher spending. Further, the Biden administration and its proposals have infused optimism into the economy.

The rounds of solid upbeat economic data indicate stronger-than-expected recovery. The U.S. added 379,000 jobs — the highest since October —in February while unemployment fell to 6.2%. U.S. manufacturing activity increased to a three-year high last month with acceleration in new orders. Consumer spending rose the most in seven months in January while construction spending surged to a record high, boosted by strong private and public outlays. Strong corporate earnings as well as signs of a healing labor market also bode well for economic growth.  

In fact, the S&P 500 and Dow Jones hit series of new highs lately while the tech-heavy Nasdaq Index is below 5% of all-time highs as it bore the brunt of the recent tech sell-off triggered by the surging yields, which had resulted in fears of overvaluation. Investors should note that surging yields is an indicator of strong economic growth rather than inflation fears. The Nasdaq Index outperformed in the past year, having climbed about 86%. Meanwhile, the S&P 500 and Dow Jones have risen nearly 60% and 53%, respectively, in the same time frame.

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Ryan Bartel 4 weeks ago Member's comment

Can add $USO to that since 4May20 and with current administration will continue to go up. Bullish.