Good morning and a Happy Monday! Market participants are shaking off the holiday malaise and getting back to work as we prepare to close the books on one of the best Novembers on record. The primary question for Financial Advisors will be whether or not markets can hold these gains as we enter the final month of 2020.
This week will help set the table for December as we have a number of key events including: corporate commentary from sell side conferences, testimony from Fed Chair Powell and Treasury Secretary Mnuchin, a jobs report, November auto sales, and tech earnings. However, one event and space is garnering the most attention from FAs.
- Trivia Question- According to the Stock Trader’s Almanac, November is historically the best performing month for the S&P (+1.6%). This year, we are on pace to set the all-time record for returns. What year currently holds the record?
Energy has been a beneficiary of the ‘Re-Opening Trade’ as a slew of vaccine headlines has pushed investors into the space. Energy is on pace for a record month of gains in the S&P. Last week we saw search activity from Financial Advisors increase while oil, stocks and ETFs rallied. The research comes ahead of a two day OPEC meeting that kicked off this morning. The group is expected to decide on whether it will extend existing oil cuts for three to four months or lift its output gradually. The decision, which is expected tomorrow morning, can have an impact on prices.
TrackStarIQ Data
| TOP ETFS – BY ALL FAs (Total Traffic) Last Week | Ticker | TOP ETFS BY FAs w/ AUM>$1B (Total Traffic) Last Week | Ticker | TOP INDUSTRIES BY ALL FAs (Total Traffic) Last Week | TOP ETF CATEGORIES BY ALL FAs (Total Traffic) Last Week |
|---|---|---|---|---|---|
| SPDR S&P 500 ETF | SPY | VanEck Vectors Gold Miners ETF | GDX | Biotechnology | Large Cap Growth Equities |
| Invesco QQQ | QQQ | SPDR S&P 500 ETF | SPY | Software – Application | Leveraged Equities |
| VanEck Vectors Gold Miners ETF | GDX | Invesco QQQ | QQQ | Auto Manufacturers | Precious Metals |
| iShares Russell 2000 ETF | IWM | iShares Russell 2000 ETF | IWM | Consumer Electronics | Technology Equities |
| Consumer Discretionary Select Sector SPDR Fund | XLY | iShares MSCI Emerging Markets ETF | EEM | Specialty Chemicals | Materials |
| ProShares Ultra VIX Short-Term Futures | UVXY | SPDR Gold Trust | GLD | Conglomerates | Consumer Discretionary Equities |
| ProShares UltraPro QQQ | TQQQ | iShares Core S&P Mid-Cap ETF | IJH | Drug Manufacturers – Specialty & Generic | All Cap Equities |
| SPDR Dow Jones Industrial Average ETF | DIA | Financial Select Sector SPDR Fund | XLF | Internet Retail | Energy Equities |
| SPDR Gold Trust | GLD | SPDR S&P Regional Banking ETF | KRE | Electrical Equipment & Parts | Small Cap Growth Equities |
| Energy Select Sector SPDR Fund | XLE | Invesco DB US Dollar Index Bullish Fund | UUP | Internet Content & Information | Alternative Energy Equities |
| Direxion Daily S&P Oil & Gas Exploration & Production Bull 2x Shares | GUSH | iShares Silver Trust | SLV | Specialty Retail | Health & Biotech Equities |
| ARK Innovation ETF | ARKK | ARK Web x.0 ETF | ARKW | Diagnostics & Research | Leveraged Volatility |
| iShares Silver Trust | SLV | U.S. Global Jets ETF | JETS | Oil & Gas E&P | Small Cap Blend Equities |
| ProShares UltraPro Short QQQ | SQQQ | ARK Innovation ETF | ARKK | Credit Services | Industrials Equities |
| Credit Suisse X-Links Crude Oil Shares Covered Call ETN | USOI | Invesco Solar ETF | TAN | Semiconductors | Large Cap Blend Equities |
| Technology Select Sector SPDR Fund | XLK | Invesco Taxable Municipal Bond ETF | BAB | Software – Infrastructure | Asia Pacific Equities |
| ProShares Ultra Bloomberg Natural Gas | BOIL | ARK Genomic Revolution ETF | ARKG | Medical Devices | Financials Equities |
| ETFMG Alternative Harvest ETF | MJ | Alerian MLP ETF | AMLP | Auto Parts | Leveraged Commodities |
| Direxion Daily Small Cap Bull 3X Shares | TNA | VanEck Vectors Rare Earth/Strategic Metals ETF | REMX | Aerospace & Defense | Volatility |
| United States Oil Fund | USO | Global X Thematic Growth ETF | GXTG | Entertainment | China Equities |
The Top ETF Searches by All Financial Advisors include the Energy Select SPDR Fund (XLE), up 27% in November, the Direxion Daily Oil & Gas Exploration and Production ETF (GUSH), a 2x Bull ETF up 84% this month, and the Credit Suisse Crude Shares ETN (USOI), up 13%. The gains in these names have been impressive so it has us wondering, is the research setting up the space for a ‘Sell the News’ reaction to this week’s OPEC announcement or a potential ‘Fear of Missing Out’ trade in December? Today, we are seeing energy as a laggard with the XLE down over 3% suggesting profit taking. FAs will continue to monitor price action as they look for returns to close out a volatile year.
Trivia Answer- In 1980 (also an election year), the S&P rose a record 10.2%. The record decline was 11.2% in 1973 during the Oil Crisis.