February 8, 2021
With a majority in the House and Senate, Biden was able to push through his $1.9 trillion stimulus package without Republican support. Even with the large package, it is expected that the deficit will fall from the record $3.1 trillion shortfall in 2020. After leading all major countries in 2020 performance, China has started 2021 strong, leading all large developed and emerging market countries in terms of equity performance. On the heels of the captivating GameStop saga, volume on precious metals was through roof at the end of the month. These and other economic topics are examined in January’s edition of Julex’s Monthly Macro Chart Book.
February 8, 2021
As hot air slowly empties from the Reddit retail trading mania, the markets can re-focus on where the money is actually flowing. Traders the past week have been moving into leveraged ETFs from Direxion that focus on semiconductors, financials, and inverse S&P 500 stocks.
The highest 1-week flows continue to focus on technology, but especially in the semiconductor industry via the
Direxion Daily Semiconductor Bull 3X ETF (SOXL). SOXL seeks daily investment results equaling 300% of the daily performance of the PHLX Semiconductor Sector Index.
The fund invests at least 80% of its net assets in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index, and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index. The index measures the performance of domestic companies engaged in the design, distribution, manufacture, and sale of semiconductors.
2020 is over.
The turbulent events of 2020 – mainly, the arrival of the coronavirus pandemic that abruptly shut down and redefined the world as we knew it – proved that market-moving events can be unexpected and incredibly damaging. In March, when people across the U.S. were forced to retreat to the safety of their own homes, markets collapsed and investors feared the worst.
Yet while 2020 is in the rearview mirror, many of its challenges remain. The stock market has clearly recovered, however, the national economy is still in disarray and the pandemic continues to rage on.
Here’s a look back at the year that was and the lessons we learned along the way:
A Financials Comeback, XLF, and the Search for Sector-Level Value February 8, 2021
Cyclical and value stocks are making a comeback, giving investors reason to revisit the once beloved value factor. Broad-based value funds make sense for many investors, but others may opt to get tactical in the search for value.
At the sector level, financials look appealing as value plays, a notion that’s giving rise to exchange traded funds such as the
XLF, one of the powerhouse SPDR products, provides exposure to an index that includes companies from the following industries: diversified financial services; insurance; commercial banks; capital markets; real estate investment trusts; thrift & mortgage finance; consumer finance; and real estate management & development. XLF contains a who’s-who of the domestic economy’s financial players, including JP Morgan, Wells Fargo, and more. The fund serves as an ideal play on the U.S. financials world.