5 Hot ETFs Leading The Wall Street Rebound

After registering the worst day of the year on Aug 5, Wall Street strongly bounced back on upbeat Chinese trade data and fixing of its onshore currency at the weakest level since 2008. China exports unexpectedly rose 3.3% year over year in July amid the rising tariff environment while imports fell 5.6%, taking the country’s surplus to $45.06 billion.

Additionally, the People’s Bank of China (PBOC) jumped in to stabilize its currency. It set the official midpoint reference for the yuan at 7.0039 per dollar on Aug 8. Though it is the weakest point for the currency against the dollar since Apr 21, 2008, it is ahead of analyst expectation of 7.0222 per dollar, per Reuters. The central bank fixed the midpoint of the currency rate below 7 yuan per dollar for the second time today at 7.0136 per dollar — the weakest level since Apr 3, 2008.

The twin developments in China has eased fears of trade tensions and renewed investors’ confidence. In fact, the S&P 500 logged in its largest one-day percentage gain in about two months on Aug 8, with all the major sectors climbing at least 1%. The S&P 500 technology index, which was at the heart of the recent sell-off, led the way, climbing 2.4% on the day.

With this gain, the S&P 500 and the Nasdaq erased all the losses, moving to the positive territory for the week. The S&P 500 is up 0.2% while the Nasdaq is up 0.4% for this week so far. Meanwhile, the Dow Jones is modestly down 0.4%.

Given the rebound, we have highlighted five ETFs that are climbing and leading the broad market this week. Any of these could be excellent plays for investors seeking to ride on the recovering sentiments at least in the near term.

Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 7.2%

This ETF provides exposure to the companies with relative strength (momentum), charging 60 bps in annul fees. It follows the Dorsey Wright Technology Technical Leaders Index and holds 39 securities in its basket. This ETF is illiquid but relatively unpopular with AUM of $257.2 million and average daily volume of 35,000 shares. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

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