Monday, August 3, 2020 – All three major indexes closed out July with a fourth straight month of gains, powered by the ever-growing influence of technology companies. Despite sharpening scrutiny over their size and influence, tech titans Apple, Facebook, Google and Amazon delivered another quarter of consensus-beating sales and profits. Their results and subsequent share price rises came after facing heavy criticism from Congress over their business practices and market dominance, once again affirming the resiliency of their operations and advantageous positioning as the pandemic-era accelerates our reliance on digital services.
Despite tech's stalwart performance, the economic picture remains decidedly mixed. Although the indexes finished with gains, this week's performance was choppy as the Fed issued another dour outlook, the U.S. experienced a record quarterly economic contraction, unemployment claims increased, coronavirus cases rose, non-tech earnings were gloomy and Congress failed to strike a follow-up coronavirus stimulus package before jobless benefits expired on Friday.
Facing this uneven economic backdrop, the DJIA, S&P 500 and Nasdaq ended the week down 0.2% and up 1.7% and 3.7% respectively. The key underpinnings of the market - monetary policy, corporate earnings and economic activity remain largely supportive for further market gains. Yet these gains are extremely tenuous and political uncertainties and the unabating coronavirus will render volatile market conditions for the foreseeable future.
ETFG Weekly Select List - The five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.
With the technology sector continuing to provide resiliency and market leadership, we'd like to feature their top-rated ETFs according to our Quant model. As of Friday, our highest rated technology ETFs are the ALPS Disruptive Technologies ETF (DTEC), First Trust Nasdaq Smartphone Index Fund (FONE), ETFMG Drone Economy Strategy ETF (IFLY), SPDR S&P Technology Hardware ETF (XTH) and Invesco S&P Equal Weight Technology ETF (RYT).
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