25 ETFs to buy in the fourth quarter
The Dow Jones Industrial Average (DJI), S&P 500 Index (SPX) and Nasdaq Composite (IXIC) all kicked off the week by wrapping up both September and the third quarter. All three snagged respectable gains for both, though the former two logged their fifth-straight monthly win. Last month also marked Wall Street’s best September performance since 2019.
Rising tensions between Iran and Israel encouraged these gains to be short-lived, however, brushing off several bouts of upbeat unemployment and payrolls data, while also sending West Texas Intermediate (WTI) crude prices through the roof. Options traders are also looking past the latest surge in Chinese stocks, which rolled in on the heels of fresh stimulus measures. Several days of steep losses has all three indexes pacing to snap their three-week win streaks. Meanwhile, the Cboe Market Volatility Index (VIX) is back below the 20 level, despite a brief breakout above the ceiling.
Red-Hot Analyst, Options Trader Picks
Several sectors were ripe for attention this week. Artificial intelligence (AI) hype is still going strong, as analysts gave Constellation Energy (CEG) and Vistra (VST) fresh price-target hikes, whereas both C3ai (AI) and Palantir Technologies (PLTR) have also remained red-hot names. Meanwhile, options traders have been circling chip giant Nvidia (NVDA), the company’s CEO a few days ago citing “insane” demand for its Blackwell chips. Further brokerage attention came from EVgo (EVGO), which landed an upgrade to “overweight” at J.P. Morgan Securities.
Best and Worst Q4 Buys
A fresh batch of historic seasonality data for both October and the fourth-quarter was on deck, too. For XLFs in Q4, we noted the top two performers tend to be the VanEck Semiconductor ETF (SMH) and Financial Select Sector SPDR Fund (XLF). The best fourth-quarter performer for stocks pulled up Broadcom (AVGO), and one popular e-tailer you may want to avoid.
Could More SPX Gains Be on the Horizon?
Next week brings a fresh slew of inflation data, with consumer price index (CPI) and producer price index (PPI) readings on tap. Several officials will also speak before and after the release of the Federal Open Market Committee’s (FOMC) meeting minutes for September, with consumer sentiment and trade deficit data in focus as well.
Don’t miss Schaeffer’s Senior Quantitative Analyst Rocky White’s deep dive into how the S&P 500 tends to perform historically, after a spike in China stocks, as well as Senior V.P. of Research Todd Salamone’s take on what factors suggest an extended rally for the index is in sight.