4 ETF Investing Areas That Ruled Last Week

Market Performance Overview

• S&P 500 and Dow Jones Gains: The S&P 500 achieved a 1.5% increase in August, marking its fourth consecutive month of gains, while the Dow Jones rose by 3.2%, also reflecting four months of growth. Notably, the S&P 500 reached a record high during this period.
• Nasdaq's Winning Streak: The Nasdaq Composite recorded a 1.6% gain, achieving its fifth consecutive monthly rise, the longest winning streak in over a year and a half.

Small-Cap Stocks and Inflation Concerns

• Russell 2000 Performance: Small-cap stocks, represented by the Russell 2000, surged approximately 7% in August, marking its fourth consecutive monthly gain and the strongest performance in over four years.
• Inflation Data Impact: Recent government data revealed that the core personal consumption expenditures price index rose by 2.9% in July, meeting estimates but higher than June's figures. This increase is concerning as it is the highest since February, raising worries about inflation remaining above the Federal Reserve's 2% target.

Consumer Sentiment and Fed Rate Cut Expectations

• Decline in Consumer Sentiment: Consumer sentiment fell to a three-month low in August, driven by concerns over tariffs and inflation, with respondents expecting faster inflation in the coming year.
• Rate Cut Speculations: Despite the inflation data, traders are pricing in an 86.4% chance of a quarter-point rate cut in September, indicating confidence that the Federal Reserve may ease monetary policy in response to a slowing labor market.

Tech Stocks Volatility and AI Bubble Concerns

• Tech Sector Pullback: The tech sector experienced volatility, particularly towards the end of August, with fears of an AI bubble. The Nasdaq Composite fell about 1.2% on the last day of the month, led by significant declines in major tech stocks.
• Notable Stock Movements: On August 29, NVIDIA shares dropped over 3.3%, Tesla fell 3.5%, Meta Platforms decreased by 1.7%, and Amazon.com saw a decline of over 1.1%.

Top Performing ETFs in August

• Roundhill Cannabis ETF (WEED): This ETF surged by 91.3% in August, driven by speculation regarding potential reclassification of marijuana by President Trump.
• Amplify Seymour Cannabis ETF (CNBS): It experienced an 83.2% increase, reflecting the broader cannabis market's growth.
• KraneShares SSE STAR Market 50 Index ETF (KSTR): This ETF rose by 29.7%, focusing on the largest companies on the SSE Science and Technology Innovation Board.
• Sprott Active Gold & Silver Miners ETF (GBUG): It gained 25.5%, targeting companies involved in gold and silver mining.
• VanEck ChiNext ETF (CNXT): This ETF increased by 25%, tracking the performance of major China A-share stocks.
• CoinShares Bitcoin Mining ETF (WGMI): It rose by 23.9%, providing exposure to companies engaged in bitcoin mining operations.

Conclusion

• The market showed resilience with notable gains across major indexes despite inflation concerns and a decline in consumer sentiment. The tech sector faced challenges, while specific ETFs, particularly in the cannabis and mining sectors, demonstrated significant growth.

• VanEck ETF Distributions: VanEck announced the 2024 annual distributions per share for its equity exchange-traded funds (ETFs), with various funds providing specific income amounts and capital gains, payable on December 24, 2024.

• Investment Risks and Tax Information: The distributions will primarily come from net investment income, with potential variations in future payments. Investors are advised to seek independent tax advice and review the prospectus for detailed information on risks associated with investing in VanEck ETFs.

• Market Performance Overview: Last week, Wall Street saw modest gains with the S&P 500 up 0.2%, driven by positive September jobs data, despite concerns over escalating Middle East tensions and a dockworkers' strike affecting U.S. ports.

• Sector Highlights: Significant ETF performances included the VanEck ChiNext ETF rising 40.7% due to China's stimulus measures, while oil-related ETFs surged as crude prices increased over 8% amid fears of supply disruptions from the Middle East conflict.

• Wall Street Performance: In the first nine months of 2024, Wall Street saw significant gains with the S&P 500 up 20.3%, driven by AI enthusiasm and rate-cut optimism despite recession fears and geopolitical tensions.

• Global Economic Developments: The Federal Reserve initiated its first rate cut in four years, while China's central bank announced monetary stimulus measures; additionally, the European Central Bank and Bank of Japan also adjusted their interest rates, reflecting shifts in global economic policies.

• U.S. Stock Market Performance: U.S. stock indices closed positively last week, with the Dow hitting a record high and the S&P 500 and Nasdaq also gaining, driven by favorable inflation and GDP reports that boosted investor confidence in the economy.

• China's Economic Stimulus: China's central bank announced significant monetary stimulus measures to address slowing growth, which positively impacted global markets and led to substantial gains in Chinese stocks, while chipmakers like Micron and NVIDIA faced mixed performances due to regulatory concerns and market shifts.