ETF Areas Making Good Bets Amid Rising Omicron Threats

The mood in Wall Street has remained chiefly tense this week as well. The Dow Jones Industrial Average is down 0.7% this week. The other two broad market indices, the S&P 500 and the Nasdaq Composite, have declined about 0.4% and 0.7%, respectively, in the same period.

The omicron strain has entered the United States, with the second case getting reported by a Minnesota resident. The Centers for Disease Control and Prevention’s confirmation of the first case of omicron in California had already led to a new wave of worries on Dec 1. The new variant is feared to be carrying the combined features of the previous variants and can have high transmissibility and lower vaccine potency.

Federal Reserve Chair Jerome Powell has also adversely impacted market sentiments by mentioning that the central bank will be discussing speeding up the tapering process from the $15 billion-a-month schedule decided previously, per a CNBC article. This move might be taken to control the persistently high inflation levels, given that the U.S. economy is strongly recovering from the pandemic-led slump.

The rising cases due to the new variant have spooked investors. They fear that implementing new lockdown measures to control the spread may hurt the global economic recovery achieved so far,following the reopening of economies. However, some market analysts are anticipating a market rally in December. According to Bank of America (NYSE:BAC), the S&P 500 index has increased 2.3% on average since 1936 and remained positive 79% of the time in December, as mentioned in a CNBC article.

Thus, considering the complexities of the current market scenario, let’s take a look at some ETF areas that can make good investment choices:

The pandemic has triggered a race to introduce vaccines and treatment options, opening up investment opportunities in the healthcare sector. Moreover, the space has been gaining increasing attention lately, largely due to the resurgence in COVID-19 infections due to the omicron variant. This has made investors jittery, compelling them to shift toward defensive investments.

Considering the current market situation, investors can consider The Health Care Select Sector SPDR Fund Play These 5 ETFs Amid Rising Omicron Variant Worries ).

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Written By: Zacks Investment Research