ETFs to Join Wall Street's Latest Rebound Rally

After a very disappointing January, stocks impressive run on bourses seems encouraging. The Dow Jones Industrial Average rose 0.8% on Feb 1, as stocks were observed to gain for the third day. The other two broad market indices, the S&P 500 and the Nasdaq Composite, were also up around 0.7% each on the same day. After gaining 3% and 3.4% on Jan 28 and Jan 31, the tech-heavy index in the correction territory gained again yesterday.

The upside in Wall Street was observed even as the benchmark 10-year Treasury yield was up by 2 basis points (bps) and again crossed 1.8% during the trading session. As reflected by U.S. manufacturing data for January, increasing inflation levels largely led to the upside in the benchmark yields. Consequently, bank stocks gained on Feb 1 as Goldman Sachs GS and JPMorgan Chase JPM rose 2.6% and 1.7%, respectively. Wells Fargo also climbed more than 3.3% on the same day.

Major tech players like Netflix NFLX and Meta Platforms also showed strength by gaining 7% and 1.8%, respectively, on Feb 1. Google-parent company, Alphabet GOOGL, also rose 1.7% on the same day.

The strength in the fourth-quarter earnings results can be applauded for the optimism in the market. Going by FactSet, 78.5% of the S&P 500 companies that have reported earnings results beat bottom-line estimations as of Feb 1 morning (per a CNBC article). In this regard, Jeff Kilburg, chief investment officer of Sanctuary Wealth, commented that “After being wildly distracted in the month of January, investors and traders are finally refocusing on earnings season. Seeing some of these beats and improved forward guidance has created a lot of optimism inside of this earnings season, which we kind of neglected due to the fact that the Federal Reserve took the center stage,” as mentioned in a CNBC article.

ETFs to Ride the Wave

Investors who seek to capitalize on the strong trends should consider the following ETFs:

SPDR S&P 500 ETF Trust SPY

SPDR S&P 500 ETF Trust seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the S&P 500 Index.

SPDR S&P 500 ETF Trust has a total expense ratio of 0.09%, with AUM of $403.69 billion (read: 5 Stocks in S&P 500 ETF That Gained Double Digits in January).

iShares Core S&P 500 ETF IVV

iShares Core S&P 500 ETF seeks to track the investment results of an index composed of large-capitalization U.S. equities.

iShares Core S&P 500 ETF has AUM of $304 billion and total expense ratio is 0.03% (read: Warren Buffett Wins in 2022: ETF Lessons to Learn From).

SPDR Dow Jones Industrial Average ETF Trust DIA

SPDR Dow Jones Industrial Average ETF Trust seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the Dow Jones Industrial Average.

SPDR Dow Jones Industrial Average ETF Trust charges an expense ratio of 0.16%, with AUM of $29.20 billion.

iShares MSCI USA Momentum Factor ETF MTUM

iShares MSCI USA Momentum Factor ETF provides exposure to large and mid-cap stocks that exhibit relatively higher price momentum by tracking the MSCI USA Momentum SR Variant Index.

iShares MSCI USA Momentum Factor ETF charges 15 bps in fees per year along with AUM of $12.15 billion.

Invesco QQQ QQQ

Invesco QQQ provides exposure to the largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq-100 Index.

Invesco QQQ has AUM of $180.36 billion and charges investors 20 bps in annual fees.

Fidelity Nasdaq Composite Index ETF ONEQ

Fidelity Nasdaq Composite Index ETF seeks to provide investment returns that closely correspond to the price and yield performance of the Nasdaq Composite Index.

Fidelity Nasdaq Composite Index ETF has AUM of $4.28 billion and the expense ratio comes in at 0.21% (read: Guide to the Nasdaq ETF Investing).

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