January was an action packed month that ultimately rocked global markets towards its close. For the U.S., tensions in the Middle East, the signing of the anticipated 'Phase one' trade deal between the U.S. and China and the subsequent coronavirus have captured markets as investors fear the worst in terms of future global growth.
For the month, the S&P 500 (NYSE: SPY) and the Dow Jones Industrial Average (NYSE: DIA) sunk from their mid-month highs, losing 0.04% and 0.9% respectively. Major ETFs that follow S&P trends like iShares Cord S&P 500 ETF (NYSE: IVV) and Vanguard S&P 500 ETF (NASDAQ: VOO) were not deeply affected by the market scare, for both are growing strong in 2020.
Moreover, the Nasdaq grew 3% for the month, signaling that the coronavirus's impact on the world's second largest economy may not have touched major U.S. companies yet. Top performers under the Invesco QQQ Trust (NASDAQ: QQQ), which provides exposure to 103 of the largest publicly traded U.S. domestic and international non-financial companies listed on the Nasdaq, have been rallying recently. These companies include Tesla (NASDAQ: TSLA), MercadoLibre (NASDAQ: MELI), Microsoft (NASDAQ: MSFT) and CoStar Group (NASDAQ: CSGP).
It appears that after the large market sell-off that took place last Friday, the U.S. stock market is bouncing back. However, many analysts believe that this may be a short-term period of growth due to the possibility of the coronavirus having greater impact on the financial quarter.
ETFs on the move:
Utilities have been showing a great run this week as more defensive stocks gain investor attention. This sector has already outpaced the S&P 500 in January and a cool off is no where in sight for the short-term. Utilities Select Sector SPDR Fund (NYSE: XLU) is a great way to maximize exposure to various stocks in this sector.
Technology is also getting a boost from investors calling for more defensive market plays. Technology Sector Sector SPDR Fund (NYSE: XLK) has been seeing great momentum despite the spreading coronavirus. Materials Select Sector SPDR Fund (NYSE: XLB) and Industrial Select Sector SPDR Fund (NYSE: XLI) also have seen advantages in the current bull market.
Gold has been seeing insane growth; investors flock to the commodity in times of distress. A few gold based ETFs include SPDR Gold Trust (NYSE: GLD), iShares Gold Trust (NYSE: IAU) and VanEck Merk Gold Trust (NYSE: OUNZ).
Energy Select Sector SPDR Fund (NYSE: XLE) and United States Oil Fund, LP (NYSE: USO) have had a pretty miserable month in terms of growth, and the end seems nowhere near in sight. Much of the decline is due to investment fears towards future demand and possible trade restrictions surrounding the coronavirus.
Retail has seen a recent rebound as Ralph Lauren topped the S&P 500 due to the company's focus moving away from malls and department stores and more toward direct to consumer initiatives. SDPR S&P Retail ETF's (NYSE: XRT) short-term growth may be halted due to major players like Adidas (OTC: ADDDF) and Nike (NYSE: NKE) stating that the coronavirus will have a material impact on their sales.