Growth stocks and related exchange traded funds rallied on Thursday with semiconductors leading the charge.
The Philadelphia SE semiconductor index gained over 4% on Thursday but was still sharply lower for the year so far, Reuters reports. Nvidia Corp and Intel Corp led the gains and helped to lift the S&P 500 and the Nasdaq.
The number of Americans filing new claims for jobless benefits dipped to a 52.5-year low last week, and unemployment rolls continued to fall.
“The initial jobless claims numbers were impressive and earnings were solid on some of these opening-back-up type companies. The overall flavor is giving people a little more sense of normalcy. But that could change; it’s the flavor of the day,” Alan Lancz, president of Alan B. Lancz & Associates Inc., told Reuters.
Investors continue to weigh how the Russia-Ukraine war will strain global supply chains that have already been disrupted by the COVID-19 pandemic. Meanwhile, crude oil prices have jumped back above $100 per barrel, fueling inflation concerns. Additionally, the Federal Reserve has outlined multiple interest rate hikes this year to clamp down on inflation.
“Through mid-February, it was all about rising rates, and then it was all about the war, and what’s concerning now is that they’ve combined,” Daniel Morris, chief market strategist at BNP Paribas Asset Management, told the Wall Street Journal. “The challenge in this environment is what do you buy. You can’t sit in cash. It is a ‘least-bad option’-type of market.”
Investors interested in the growth style can turn to targeted strategies like the American Century Focused Dynamic Growth ETF (FDG). FDG is a high-conviction strategy that invests 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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