Growth stocks and related exchange traded funds got a leg up on the broader markets on Thursday after traders digested a steady U.S. jobs market and the potential for inflationary producer prices.
Big technology stocks led the charge on Thursday as traders focused on areas that had missed out on the overall market pushing higher the past week.
“The move into big tech is simply a trading opportunity. Big tech has been down for a week or so, underperforming the market pretty significantly,” Tim Ghriskey, chief investment strategist at Inverness Counsel, told Reuters. “There are bargain hunters coming in, jumping on those securities.”
Updated data revealed U.S. producer prices in July experienced their largest annual advance in over a decade, adding to inflation concerns, after Wednesday’s U.S. consumer price index showed the pace appeared to be slowing.
Mike Loewengart, managing director of investment strategy at E*TRADE Financial, though, argued that the data reflect well-known supply chain challenges that will not change Federal Reserve policy any time soon.
“Everyone is expecting potentially tapering to begin in September,” Loewengart told Reuters. “But for the most part, it would not change the conducive environment that we are currently in, for additional gains in equity markets.”
Investors interested in the growth style can turn to targeted strategies like the American Century Focused Dynamic Growth ETF (FDG), which is designed to invest in early-stage, high-growth companies. FDG is a high-conviction strategy designed to invest in early-stage, rapid-growth companies with a competitive advantage and high profitability, growth, and scalability.
Additionally, investors can look to the American Century STOXX U.S. Quality Growth ETF (NYSEArca: QGRO). QGRO’s stock selection process is broken down into high-growth stocks based on sales, earnings, cash flow, and operating income, along with stable-growth stocks based on growth, profitability, and valuation metrics.
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