ETFs
5 Top Ranked ETFs in Early May – May 10, 2024
After a tumultuous April, Wall Street regained its momentum in early May, driven by strong corporate profits and new bets on a Fed rate cut. The resurgence of technology stocks with the revival of the AI craze has added to the strength. The rally was broad-based, with all three major indexes just a few points away from their record highs.
The Dow is less than 1.1% from its March 28 closing record, while the S&P 500 is just 0.8% from its record high from the same day. The Nasdaq is just 0.6% off its April 11 closing record, according to Dow Jones Market Data. In fact, the Dow rose in all seven sessions this month, marking its longest winning streak this year. The S&P 500 rose above the 5,200 level at the close for the first time since April 9.
Given this, investors should bet on ETFs that have been winners over the past week and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). These are Invesco Oil & Gas Services ETF (PXJ – Free report) , Invesco Dorsey Wright Industrials Momentum ETF (PNR – Free report) , SPDR S&P Semiconductor ETF (XSD – Free report) , Invesco S&P MidCap Momentum ETF (XMMO – Free report) And Invesco S&P SmallCap Information Technology ETF (PSCT – Free report) .
The picture emerging from the first quarter earnings season continues to be one of steady improvement and resilience, with a slight acceleration in the pace of earnings growth and an increase in estimates for future periods. Total profits for the 440 S&P 500 members that reported first-quarter results rose 5% from the same period last year, thanks to revenues rising 4.2%, including 78.0 % beat EPS estimates and 60.9% beat revenue estimates.
According to FactSet, American companies are experiencing their best earnings season in almost two years. With 80% of S&P 500 companies having already reported their results, the index is on track to record a record. 5% growth of earnings per share for the first quarter. This will be the largest year-over-year increase since the second quarter of 2022 and higher than the 3.2% growth expected by analysts before the start of the season (read: ETFs to Enjoy Best Earnings Growth in Two Years).
A weaker-than-expected jobs report revived bets on an anticipated Federal Reserve rate cut. U.S. services sector activity also contracted unexpectedly in April, after increasing for 15 straight months. In another weak recent data, consumer confidence fell last month to its lowest level since mid-2022. Additionally, the United States had a weak start to the year due to a decline in consumer and government spending amid rising inflation. The economy grew at its slowest in two years, with annual GDP rising 1.6% in the first quarter.
While weak data has recently pushed up bets on faster-than-expected rate cuts, the Fed has signaled that its fight against inflation will continue over a longer period, setting the stage for a period of prolonged rise in rates.
We have provided a detailed profile of the ETFs mentioned above below:
Invesco Oil & Gas Services ETF (PXJ – Free report) – Up 5.3%
The Invesco Oil & Gas Services ETF tracks the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on various investment merit criteria, including price momentum, earnings momentum, quality, stock of direction and value. He has 32 titles in his basket. The Invesco Oil & Gas Services ETF has accumulated $94.1 million and charges 63 basis points in fees per year. It trades an average daily volume of 16,000 shares and has a Zacks ETF Rank #2 (read: Top-Ranked Energy ETFs to Benefit from Rebounding Oil Prices).
Invesco Dorsey Wright Industrials Momentum ETF (PNR – Free report) – Up 5.1%
The Invesco Dorsey Wright Industrials Momentum ETF provides exposure to 43 industrial companies that exhibit relative strength (momentum) and tracks the Dorsey Wright Industrials Technical Leaders Index. It is widely used in construction and engineering, electrical equipment, trading companies and distributors, and building products. The Invesco Dorsey Wright Industrials Momentum ETF has accumulated $229.2 million in its asset base and charges 60 basis points in annual fees. It trades an average daily volume of 13,000 shares and has a Zacks ETF Rank #2.
SPDR S&P Semiconductor ETF (XSD – Free report) – 4.4%
The SPDR S&P Semiconductor ETF provides exposure to the semiconductor segment of the broader technology sector and tracks the S&P Semiconductor Select Industry Index. She holds 39 stocks in her portfolio. The SPDR S&P Semiconductor ETF has $1.4 billion in assets under management and an average daily volume of approximately 56,000 shares. The SPDR S&P Semiconductor ETF charges 35 basis points in fees per year and has a Zacks ETF Rank #1 (read: Top-Ranked Energy ETFs to Benefit from Rebounding Oil Prices).
Invesco S&P MidCap Momentum ETF (XMMO – Free report) – Up 4.4%
The Invesco S&P MidCap Momentum ETF tracks the S&P Midcap 400 Momentum Index, designed to identify mid-sized companies with the highest momentum scores. It holds 79 stocks in its basket, with key holdings in the industrials, information technology and consumer discretionary sectors. The Invesco S&P MidCap Momentum ETF has $2.5 billion in assets under management and charges 34 basis points in annual fees. It trades an average daily volume of 192,000 shares and has a Zacks ETF Rank #2.
Invesco S&P SmallCap Information Technology ETF (PSCT – Free report) – Up 4.2%
The Invesco S&P SmallCap Information Technology ETF provides exposure to companies primarily engaged in providing information technology-related products and services, including computer hardware and software, Internet, electronics, semi-automatic drivers and communication technologies. It tracks the S&P SmallCap 600 Capped Information Technology Index, holding 68 stocks in its basket. The Invesco S&P SmallCap Information Technology ETF has $328.6 million in assets under management and charges 68 basis points in annual fees. It has a Zacks ETF Rank #1.
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