5 Niche ETFs That Led The Market Rally Higher Last Week

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Wall Street strongly rebounded last week with all three major bourses registering the best week since November. The blue-chip Dow Jones gained 3.9% while the S&P 500 and the tech-heavy Nasdaq Composite Index spiked 4.7% and 6%, respectively. In fact, both the S&P 500 and Dow Jones enjoyed the longest winning streak since August 2020.

The gains were driven by the fading of retail trading frenzy for stocks like GameStop (GME - Free Report), expectations of a large stimulus by U.S. President Joe Biden’s administration and solid corporate earnings. Notably, the stronger-than-expected results so far in the fourth quarter have led analysts’ to raise their estimates for the coming quarters. Earnings growth for Q4 has turned modestly positive, following three-straight quarters of decline, thanks to impressive results from the tech sector leaders.

The Senate has passed a budget resolution, allowing Congress to continue its quest toward passing a $1.9 trillion coronavirus stimulus bill. Additionally, signs of a healing labor market, continued optimism surrounding new vaccines, widening reach of vaccination, and easing restrictions drove the stocks higher.

The U.S. economy added 49,000 jobs last month, indicating a return to growth after job losses in December. The unemployment rate also dropped to 6.3%, down significantly from its pandemic high of 14.7% in April.  

While there have been winners in many corners of the space, we have highlighted five ETFs from different zones that were at the heart of the market rally last week:

Cannabis: Global X Cannabis ETF (POTX - Free Report) – Up 26.5%

POTX seeks to invest in companies across the cannabis industry and tracks the Cannabis Index. It holds 18 stocks in its basket, with Canadian firms accounting for 79% of assets while the United States and Britain take 10.5% and 6.9% share, respectively. The product has accumulated $115.4 million in its asset base and trades in an average daily volume of 312,000 shares. Expense ratio comes in at 0.50%.

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