It has been relatively quiet as we pass the halfway point for the week. The back half of the week may provide a little more volatility for markets as we get a look at President-elect Joe Biden’s economic plan on Thursday and the start of earnings season. On the earnings front, we have some interesting bellwether plays starting on Thursday with airline giant Delta (DAL), financial behemoth Blackrock (BLK) and the World’s largest semiconductor in Taiwan Semi (TSM). This will set the table for the money centers on Friday, most notably J.P. Morgan (JPM).
- Trivia Question- What was the first mutual fund to include stocks and bonds? (Answer below)
The lack of direction has made it difficult to pick out one key theme in terms of surges in research by Financial Advisors. We did see a search for quality at the top of the ETF list. An expansion into global tech was another area of interest. There are a few ETFs and stocks that caught our attention. We will break them down and discuss key themes during earnings season that could impact these sectors. The goal is to provide investment ideas and talking points for potential clients.
Here are some highlights of research surges* this week –
|RANK||TOP ETFS – BY ALL FAs (Surge Traffic) This Week||Ticker||TOP STOCKS- BY ALL FAs (Surge Traffic) This Week||Ticker||TOP INDUSTRIES BY ALL FAs (Surge Traffic) This Week||TOP ETF CATEGORIES BY ALL FAs (Surge Traffic) This Week|
|1||iShares U.S. Consumer Goods ETF||IYK||LA Jolla Pharma||LJPC||Non-Operating Establishments||Mortgage Backed Securities|
|2||Invesco Dynamic Software ETF||PSJ||Churchill Capital Corp IV Cl A||CCIV||Help supply services||Mid Cap Blend Equities|
|3||iShares Edge MSCI USA Quality Factor ETF||QUAL||Cambium Networks Corp||CMBM||Travel Services||Building & Construction|
|4||SPDR S&P Retail ETF||XRT||1Life Healthcare Inc||ONEM||Measuring and controlling devices, misc||Emerging Markets Bonds|
|5||Global X Internet of Things Thematic ETF||SNSR||Blackboxstocks Inc.||BLBX||Federal and federally sponsored credit||Consumer Staples Equities|
|6||Teucrium Soybean||SOYB||Signal Advance, Inc.||SIGL||Diversified Industrials||Leveraged Bonds|
|7||MicroSectors FANG+ Index 3X Inverse Leveraged ETN||FNGU||NeoMedia Technologies, Inc.||NEOM||Plastics products, misc||Water Equities|
|8||AdvisorShares Ranger Equity Bear ETF||HDGE||Property Solutions Acquisition Corp||PSAC||Retail-Miscellaneous Retail||Real Estate|
|9||iShares Core 1-5 Year USD Bond ETF||ISTB||Dalrada Financial Corp.||DFCO||Grocery Stores||Currency|
|10||MicroSectors FANG+ Index -3X Inverse Leveraged ETN||FNGD||Dolphin Entertainment Inc||DLPN||Bank holding companies||Agricultural Commodities|
|11||iShares MSCI EAFE Growth ETF||EFG||CNB Bank Shares, Inc.||CNBN||Industrial Distribution||Inflation-Protected Bonds|
|12||SPDR FactSet Innovative Technology ETF||XITK||Movado Group, Inc.||MOVAA||Leisure||Preferred Stock/Convertible Bonds|
|13||iShares Global Tech ETF||IXN||OMNIQ Corp.||OMQS||Chemicals & Allied Products||Inverse Bonds|
|14||Invesco Dynamic Building & Construction ETF||PKB||Mesoblast Ltd Ads||MESO||Security & Protection Services||Foreign Small & Mid Cap Equities|
|15||Direxion Daily Retail Bull 3X Shares||RETL||American Cryostem Corp.||CRYO||Recreational Vehicles||Leveraged Equities|
|16||Global X MLP ETF||MLPA||DIRECTA PLUS PLC||DTPKF||Aircraft||Global Equities|
|17||First Trust NASDAQ CEA Cybersecurity ETF||CIBR||Voxx Intl Corp||VOXX||Auto Manufacturers||Government Bonds|
|18||Schwab Short-Term U.S. Treasury ETF||SCHO||Charlie’s Holdings, Inc.||CHUC||Credit Services||Oil & Gas|
|19||ProShares K-1 Free Crude Oil Strategy ETF||OILK||U.S. Well Services Inc||USWS||Cutlery, Handtools & General Hardware||Corporate Bonds|
|20||ProShares Ultra Financials||UYG||Maximus Inc||MMS||Semiconductors and related devices||Inverse Equities|
ETFs and Stocks of Interest:
- iShares U.S. Consumer Goods (IYK), #1 Top ETF All FAs surge traffic- The ETF provides exposure to U.S. companies that produce consumer goods including food, auto, and household goods. Top holdings include TSLA, PG, PEP, KO and NKE. PG and KO are both reporting earnings next week. Today’s Fed Beige Book discussed some of the higher input costs companies we are seeing as well as a lack of pricing power. This could weigh on margins. Consumer goods operate on tight margins so any pressure would be notable. However, the consumer has remained strong, which should help drive earnings. The IYK has enjoyed a steady rise since its March decline, running from $95 to the $179 area. There are signs of $180 playing some resistance so this will be a key level to watch as we are provided earnings reports from the group.
- iShares USA Quality Factor (QUAL), #3 Top ETF All FAs surge traffic- What makes a quality company? The QUAL ETF strives to find exposure to large and mid-cap U.S. stocks exhibiting positive fundamentals such as high return on equity, stable year-over-year earnings growth and low financial leverage. Some of the top names in this ETF include AAPL, MSFT, NKE, KO, and BLK. Interesting to see some overlap between the IYK and QUAL ETF. Also of interest, a little divergence from what we saw last week when small- and mid-cap dominated searches. QUAL has had a rather dull start to 2021 but, perhaps, that is why it is finding its way on FA radars. For those jaded with the high flying names, this may provide a safer alternative to park some money.
- Global Internet of Things (SNSR), #5 Top ETF All FAs surge traffic- This is a little more in line with themes we have seen over the past couple of months. SNSR seeks to invest in companies that stand to benefit from a broader adoption of the Internet of Things (IoT). As we write this newsletter, we have the backdrop of the annual Consumer Electronics Show (CES) which is rolling out the latest and greatest in tech. 5G has been one of the top themes in focus as evident by Verizon (VZ) being the keynote speaker at this show. The U.S. makes up 49% of this ETF so there is global representation. Stocks traded in the U.S. with heavy weightings in this ETF are STM, GRMN, SWKS, ST and ADT. QUAL recently broke above resistance at $31 level to hit an all-time high of $33.85 today.
- Cambium Networks (CMBM), #3 Top Stocks All FAs surge traffic- Staying on the 5G theme, CMBM is a name that saw increased interest among Financial Advisors. We always find it interesting when a name gets picked up and there is no news associated with the activity. CMBM is a provider of wireless broadband networking infrastructure. Basically, they provide products that allow networking equipment to amplify broadband connectivity. This latency is of course the holy grail of 5G. CMBM is seeing ample interest as the 5G buildout is under way. The company handily beat Q3 expectations and provided an upbeat outlook for 2021 as the 5G roll out continues. The stock is trying to breakout above the $30 level and holds a reasonable valuation, relatively speaking, of 27x Forward Price to Earnings.
- Voxx International (VOXX), #17 Top Stocks All FAs surge traffic- The company makes automotive and consumer electronics such as in-vehicle entertainment, automotive security, reception products and audio components. VOXX reported impressive Q3 results on Monday, with Earnings per Share coming in at $0.74 compared to $0.10 in the prior year on revenue growth of 82% year over year. EBITDA was up 177% which suggests strong margins and an economy of scale as it ramps up production. The stock ripped above $15 in reaction to the news and is attempting to hold gains in the $22 area.
Trivia Answer- The Wellington Fund, created in 1928, was the first fund to hold both these asset classes.