4 ETFs At The Heart Of The Market Rebound

The stock market has made an impressive comeback, recovering more than half of the losses in the vicious sell-off seen in early February due to rising inflation and fears of higher interest rates, which sent the major U.S. indices to a correction territory.

The Dow Jones and S&P 500 climbed 4.3% each, representing their best weekly performances since 2016 and 2013, respectively. Meanwhile, the Nasdaq jumped 5.3%, notching its biggest one-week gain since 2011. Rounds of positive economic data led to the rebound in stocks.

Data Flows

While core consumer price index increased more than expected in January, a year-over-year increase of 1.8% in inflation was on par with the same period a year ago. Additionally, retail sales dipped 0.3% in January — the lowest level in 11 months, signaling that the economy may not be expanding too quickly. The two data eased inflationary pressure. Further, the housing market seems to be riding on strong momentum this year with new home construction rising to the highest level since October 2016 and building permits at a 10½-year high last month. A gauge of homebuilders’ confidence is also near the highest level since 1999.

Consumer sentiment as measured by the initial reading of University of Michigan jumped to the second-highest level since 2004 in February. Investors were also encouraged by the strong fourth-quarter corporate earnings. Total earnings for the 398 S&P 500 members that have reported results are up 14.5% from the same period last year on 9% higher revenues, with 77.9% beating EPS estimates and 75.6% beating revenue estimates.

Rising incomes, growing employment, optimism over the new tax legislation as well as surge in global economic growth that continued to boost consumers’ confidence amid the market turbulence add to the strong outlook.

Given this, we have highlighted four ETFs that hit their all-time highs last week. Any of these could be excellent plays for investors seeking to ride on the recovering sentiments at least in the near term.