ETF Winners Amid Last Week's Record Loss in "Magnificent 7"

Last week witnessed the largest collective loss for the "Magnificent Seven" technology-related stocks, with a total of $950 billion erased from their market capitalizations, as quoted on MarketWatch. This figure surpasses the previous record loss of $872 billion in January 2022.

High inflation, talks of higher-for-longer interest rates in the United States, flare-ups in geopolitical crisis and receding euphoria about AI investments weighed on risk-on trade sentiments. High-growth stocks were especially marred by a surge in interest rates.

Overall, the S&P 500 lost 3.1%, the Dow Jones advanced 0.01% and the Nasdaq plummeted 5.5%, respectively. The benchmark U.S. treasury yield started the week at 4.63%, hit a closing high of 4.67% on Apr 16 and ended the week at 4.62%.

Individual Performances of Key Players of "Magnificent Seven"

    Tesla Inc TSLA: Leading the decline in percentage terms, Tesla's stock slumped by 14%, reducing its market cap by $76 billion and losing its ranking among the largest U.S. companies.

    Nvidia Corp NVDA: Experiencing the most significant absolute loss, Nvidia's market cap plunged nearly $300 billion due to a weekly stock drop of 13.6% and a historical single-day decline of 10% on Apr 19, 2024.

    Apple Inc AAPL and Microsoft Corp MSFT: Both companies contributed significantly to the overall loss, with Apple shedding $178 billion and Microsoft $169 billion in market value.

    Amazon.com AMZN: Amazon lost $118 billion in market cap after a decline of 2.56% in its stock price.

    Alphabet Inc GOOGL: Alphabet saw a reduction of $41 billion from its market valuation.

    Meta Platforms META: Meta's market cap fell by $68 billion during the week.

Semiconductor Market Crash

The semiconductor sector, particularly impacted by these losses, saw a broader "unwind" according to industry analysts, per a MarketWatch article. Nvidia's record losses indicate the intense pressure faced by chipmakers, suggesting the likelihood of a sustained downturn in the sector.

There was also ASML Holding's ASML — a world leader in the manufacture of advanced technology systems for the semiconductor industry — announcement of a steep decline in bookings during the first quarter, catching investors off guard last week.

The news was crucial for the chip industry as ASML's key customers include TSMC, Samsung and Intel INTC, the world's top processor foundries, which, in turn, make chips for AMD AMD, Nvidia, Qualcomm and Apple, per CNBC.

Heightened Volatility in Wall Street

There was heightened volatility and uncertainty in the market due to concerns over high price inflation and potential shifts in Federal Reserve policy. There were stricter remarks from Atlanta Fed president Raphael Bostic that reinforced worries about interest rate cuts not happening until the end of the year. Bond yields rose accordingly and mortgage rates topped 7%.

Upbeat U.S. Retail Sales Data

U.S. retail sales were better than expected in March after returning to a growth trajectory in February. On Apr 15, the Department of Commerce reported that retail sales grew 0.7% month over month in March, well above the consensus estimate of 0.3%. Moreover, February's data was revised upward to an increase of 0.9% from 0.6% reported earlier.

Year over year, retail sales increased 3.6% in March. Core retail sales (excluding auto) grew 1.1% month over month in March, well above the consensus estimate of 0.5%. Moreover, February's data was revised upward to an increase of 0.6% from 0.3% reported earlier.

ETFs in Focus

Against this backdrop, below we highlight the winning ETFs of last week.

AXS Short Innovation Daily ETF SARK – Up 10.6%

The AXS Short Innovation Daily ETF seeks daily inverse investment results and is intended to be used as a short-term trading vehicle. The fund charges 75 bps in fees.

Roundhill Daily Inverse Magnificent Seven ETF MAGQ – Up 8.3%

The Roundhill Daily Inverse Magnificent Seven ETF seeks daily investment results, before fees and expenses, that correspond to the inverse of the performance of the Roundhill Magnificent Seven ETF. The fund charges 95 bps in fees.

USCF Aluminum Strategy Fund ALUM – Up 7.2%

The USCF Aluminium Strategy Fund seeks investment results that generally correspond over the long term to the performance of the price of aluminum. The fund charges 65 bps in fees.

abrdn Bloomberg Industrial Metals Strategy K-1 Free ETF BCIM – Up 6.2%

The underlying Bloomberg Industrial Metals Subindex consists of 4 commodities, which are weighted 2/3 by trading volume and 1/3 by world production with an additional criteria of global economic significance. The fund charges 40 bps in fees.

United States Copper Index Fund CPER – Up 5.2%

The underlying SummerHaven Copper Index Total Return reflects the performance of the investment returns from a portfolio of copper futures contracts on the COMEX exchange. The fund charges 97 bps in fees.

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