Best & Worst ETFs of October
Zacks Investment Research | Nov 02, 2020 08:00PM ET
October 2020 saw some solid stock market gyrations. The month is traditionally the most volatile, as the VIX, the fear gauge index, tends to top in October, according to Macro Risk Advisors, as quoted on CNBC .
This October was no different with stocks seesawing on election uncertainty. Failed stimulus talks, subdued tech earnings and rising coronavirus cases on the global front were the added Wall Street woes. The S&P 500, the Dow Jones and the Nasdaq composite lost about 3.3%, 4.7% and 3.7%, respectively, in the month.
Against this backdrop, below we highlight a few ETF winners and losers of October.
h3 Toppers/h3 h3 Banks/h3The yield curve steepened in October. Still-strong stimulus hopes despite President Trump’s announcement of a halt in stimulus talks led to the rise in long-term bond yields. The benchmark U.S. treasury yields gained 20 bps to 0.88% in October while the two-year treasury yields hovered in the range of 0.13% to 0.18%.
As banks seek to borrow money at short-term rates and lend at long-term rates, a steepening yield curve will earn more on lending and pay less on deposits. This will expand net margins and increase banks’ profits. As a result, all banks gained and SPDR S&P Regional Banking (NYSE:KRE) ETF NIB lost 10.2% in October.
Data released in mid-October indicated that cocoa processing in Europe dropped 4.7% in the third quarter to the smallest for that period noticed in four years. North America bean grinding slumped 4% to the minimum level for the period in 12 years, while processing plunged 10% in Asia.
h3 Homebuilding/h3iShares US Home Construction ETF Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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