U.S. equities and stock exchange traded funds were mostly stuck in sideways trading over January, and despite slipping in the last few sessions of the month, U.S. markets eked out their first January rise since 2013.
U.S. markets were slightly higher over January, with the Dow Jones Industrial Average down 0.1%, the Nasdaq Composite 3.4% higher and the S&P 500 up 0.8%.
The best performing non-leveraged exchange traded products for the past month include the Global X Uranium ETF (NYSEArca: URA) up 35.1%, PureFunds Junior Silver Miners ETF (NYSEArca: SILJ) 23.7% and Global X Copper Miners ETF (NYSEArca: COPX) up 23.5%.
Uranium miners and related ETFs are heating up on hopes President Donald Trump’s administration will be more nuclear friendly. While Trump has not said much about investing in nuclear power since the election, many observers view Trump as a boon for the industry ahead, especially with the administration revealing a looser stance on regulation. Trump could soften environmental regulations and pull back government support for incentives in alternatives like wind and solar.
SILJ, the best performing non-leveraged ETF of 2016, continued to shine in January as silver and other precious metals enjoyed safe-haven demand while the equities market suffered a correction. The metal also maintained its momentum as the Federal Reserve lowered its interest rate outlook to only two hikes this year from a previously expected four rate hikes.
Copper prices also strengthened on the weaker U.S. dollar and optimism over U.S. economic growth. Many anticipate the Trump administration will help instigate growth in many industrial and materials segments through infrastructure spending and a pledge to build a wall along the Mexican border. Additionally, the improving housing market also supports demand for copper for wiring and other miscellaneous needs.
On the other hand, the worst non-leveraged ETPs of the past month include the e REX VolMAXX Long VIX Weekly Futures Strategy ETF (BATS: VMAX) down 28.3%, iPath Bloomberg Natural Gas Subindex Total Return ETN (NYSEArca: GAZ) down 24.3% and ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) down 23.9%.
The month of January started off on an upbeat note as strengthening economic data, such as improved consumer sentiment, manufacturing, jobs and spending, supported sentiment and market momentum. Moreover, strong fourth quarter results supported the lofty valuations in stocks.
However, U.S. equities mostly stayed within range, with the Dow Jones Industrial Average hovering below the 20,000 for most of the month, as many waited on further guidance and clarification on President Donald Trump’s policies.
Political risk kept stocks from breaking out. For instance, Trump singled out the high prices in the drug industry mid-January, which weighed on pharmaceuticals and biotechnology stocks.
In late January, the Dow crossed over the historic 20,000 mark as strong Q4 earnings helped push stocks higher. Nevertheless, toward the last few sessions of the month, equities pulled back.
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