7 Equity ETFs Excel In Goldilocks Scenario While Market Ponders Fed Rate Hike Outcome

Author: Piero Cingari | September 01, 2023 11:43am

It has been a data-rich week, culminating with the Bureau of Labor Statistics releasing the August jobs report on Friday.

Despite non-farm payrolls surpassing expectations at 187,000 versus the projected 170,000, the report revealed an uptick in the unemployment rate, rising from 3.5% to 3.8%, and wage growth falling short of predictions.

On the same day, the ISM Manufacturing PMI showed a marginal increase from 46.4 to 47.6, though it remained in contraction territory.

These numbers reaffirm the ‘not too hot, not too cold’ state of the economy, consistent with the PCE price index data – the Fed’s favorite inflation gauge – meeting expectations earlier in the week.

Risk assets, especially stocks, are responding positively to this new ‘Goldilocks’ scenario for the U.S. economy, with investors increasingly confident that the latest economic data may lead the Fed to conclude its rate-hike campaign. Fed futures now indicate a 93% likelihood of unchanged rates in September and 63% in November, according to the CME Group Fed Watch Tool.

The S&P 500 index, tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY), has risen by 2.8% this week, putting it on track for its best weekly performance since the end of March 2023, the second-best of the year.

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Friday’s Best Performing Equity ETFs

Here are the equity ETFs that rallied today following the release of the latest economic data:

1. VanEck Oil Services ETF (NYSE:OIH) up 2.8%
   – Best performing stock: Nabors Industries Ltd. (NYSE:NBR) up 7.2%
   
2. SPDR Metals & Mining ETF (NYSE:XME) up 2.3%
   – Best performing stock: Freeport McMoran Inc. (NYSE:FCX) up 4.5%
   
3. SPDR S&P Oil & Gas Explor & Production (NYSE:XOP) up 2.2%
   – Best performing stock: CVR Energy Inc. (NYSE:CVI) up 4.5%
   
4. SPDR Regional Banking ETF (NYSE:KRE) up 2.2%
   – Best performing stock: Flushing Financial Corp. (NASDAQ:FFIC) up 5.3%.
   
5. Energy Select Sector SPDR Fund (NYSE:XLE) up 1.5%
   – Best performing stock: Devon Energy Corp. (NYSE:DVN) up 2.8%
   
6. iShares MSCI Emerging Markets ETF (NYSE:EEM) up 1.5%
   – Best performing stock: Lufax Holding Ltd (NYSE:LU) up 12%
   
7. iShares Russell 2000 ETF (NYSE:IWM) up 1.4%
   – Best performing stock: EOS Energy Enterprises Inc. (NASDAQ:EOSE) up 24%

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Posted In: CVI DVN EEM EOSE FCX FFIC IWM KRE LU NBR OIH SPY XLE XME XOP