5 ETFs To Watch When November Inflation Data Drops Tuesday

Few events capture as much attention and anticipation as the monthly inflation report, with investors scrutinizing these figures to gauge future interest rate decisions and guide portfolio adjustments.

Rarely does an economic announcement hold as much significance as this Tuesday’s U.S. Consumer Price Index (CPI) data for November, particularly as it aligns with the commencement of the Federal Reserve’s final meeting of the year.

Economists have cast their forecasts with the median projection showing a marginal decrease in the annual CPI inflation rate from October’s 3.2% to 3.1% for November. The core CPI rate, a critical measure excluding the often volatile food and energy prices, is expected to hold steady at 4% year on year.

The October inflation data, which hit the newsstands on Nov. 14, came with its share of surprises, leading to pronounced market movements. It reported a year-on-year inflation rate of 3.2%, modestly below September’s 3.7% and slightly under the predicted 3.3%. The core inflation rate stood firm at 4% year-on-year, a tad lower than the anticipated 4.1%.

This data sparked notable market reactions:

• The SPDR S&P 500 ETF Trust SPY saw a 1.9% uplift.
• Invesco QQQ Trust QQQ experienced a 2.1% increase.
• iShares 20+ Year Treasury Bond ETF TLT enjoyed a 2.3% jump.
• In contrast, the Invesco DB USD Index Bullish Fund ETF UUP, tracking the U.S. dollar, dipped by 1.6%.

Amid these broad market shifts, sector- and industry-specific ETFs also demonstrated noteworthy performance following the October CPI data.

Best-Performing ETFs On October CPI Data

1. Invesco Solar ETF TAN: TAN surged by 10.3% on the day the last CPI report was released. The spike was influenced by significant gains in Enphase Energy Inc. ENPH, up 16.4%, and First Solar Inc. FSLR, up 11.4%, according to BenzingaPro data.
2. SPDR Regional Banking ETF KRE: Regional banks rallied 7.4%, buoyed by strong performances from KeyCorp Inc. KEY, up 9.9%, and Citizens Financial Group Inc CFG, up 6.5%.
3. SPDR Real Estate Select Sector XLRE: The real estate sector saw a 5.5% increase, with standout gains in SL Green Realty Corp SLG, up 17.5%, Vornado Realty Trust VNO, up 15.5%, and Kilroy Realty Corp. KRC, up 12.7%.
4. ARK Innovation ETF ARKK: Cathie Wood‘s flagship fund advanced 5.1%, largely driven by Tesla Inc. TSLA’s 6.1% jump.
5. VanEck Gold Miners ETF GDX: The ETF tracking gold mining stocks rose by 4.8%, with Harmony Gold Mining Co. HMY leading the pack, up 14.4%. Industry giant Newmont Corp. NEM climbed 5.5%.

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