ETFs with Strong Momentum Face September Headwinds
August ended on an upbeat note for Wall Street, with the S&P 500 rising over 2.5% and the Nasdaq gaining more than 3%. However, concerns about energy prices, inflation, and a potential September rate hike from Fed Chief Kevin Warsh weighed on markets at month's end.
Despite these concerns, some ETF areas showed strong momentum in August. One of them is palladium, as represented by the abrdn Physical Palladium Shares ETF (PALL). Palladium futures reached a three-month high due to tighter emissions rules and rising demand from hybrid vehicles. However, higher Fed rate-hike expectations could impact the metal's price.
The global cannabis market is projected to reach $1.43 trillion by 2034, according to Fortune Business Insights. This has led to a surge in ETFs like AdvisorShares Pure US Cannabis (MSOS) and YOLO, which are up 17.6% and 23.4%, respectively.
Agriculture-related ETFs such as Invesco DB Agriculture (DBA) have also seen gains due to inclement weather and geopolitical tensions affecting soft commodities like wheat, corn, and soybeans. Citi recently raised its price targets for these crops.