Home etftrends.com BUZZ Investing: U.S. Markets Climb Amid Crypto Rally

BUZZ Investing: U.S. Markets Climb Amid Crypto Rally

U.S. domestic markets gained during the recent period between Index selection dates (February 8, 2024 – March 21, 2024, the “Period”). The S&P 500 Index climbed by 3.3%, while the tech-heavy Nasdaq Composite Index increased by 2.3%. This marked the second consecutive Period the Nasdaq didn’t outperform the S&P 500, indicating a diversification of market gains beyond the dominant ‘Magnificent Seven’ mega-cap tech stocks that have previously led market rallies. The BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index”) notably outperformed with a 9.4% rise, primarily fueled by significant advancements in cryptocurrency-related stocks, in sync with Bitcoin’s impressive 56% jump. This surge in Bitcoin’s value followed the introduction of new U.S. spot bitcoin exchange-traded products, drawing substantial investments. NVIDIA Corp (NASD: NVDA) emerged as a focal point of the earnings season, its stock soaring over 28% during the month and eclipsing a $2 trillion valuation. This surge was fueled by the company’s impressive revenue growth of 265%, significantly outpacing analyst expectations, largely due to its booming artificial intelligence business.

The release of the Federal Reserve’s FOMC minutes on February 22nd further shaped market dynamics, revealing the Fed’s cautious approach towards interest rate adjustments. Despite expectations for eventual rate cuts, the minutes clarified that such changes would not occur imminently, leading to a significant shift in investor expectations regarding the timing of these adjustments. According to the CME FedWatch Tool, the probability of the Fed maintaining current rates through the June meeting surged from under 4% to over 40% during the Period. Reflecting shifting interest rate expectations, 2-year bond yields rose by 24 bps during the Period. This recalibration of expectations regarding monetary policy underscored the nuanced relationship between central bank policy, economic data, and market movements, highlighting the delicate balance the Fed seeks to maintain amidst ongoing economic uncertainties.

Target Rate Probabilities for June 2024 Fed Meeting

Target Rate Probabilities for June 2024 Fed Meeting

Source: CME FedWatch Tool

The BUZZ Index returned 13.08% during the month of February compared to a return of 5.34% for the S&P 500 Index during the same period. Year-to-date, the BUZZ Index leads the S&P 500 with returns of 9.00% and 7.11%, respectively, as of the end of February.

Shares of Cryptocurrency-related Stocks Pace Advancing Stocks Within the BUZZ Index

In the recent Period, MicroStrategy Inc (NASD: MSTR), recognized for its substantial Bitcoin investments, saw its stock soar by 185.3%, nearly tripling in value, while Coinbase (NASD: COIN), a premier cryptocurrency exchange, experienced a 76.6% rise. These two companies accounted for almost two-thirds of the BUZZ Index’s growth during this Period. Super Micro Computer Inc (NASD: SMCI), known for its high-performance server technology catering to data centers, cloud computing, and enterprise IT, also enjoyed significant growth with its shares increasing nearly 62%. This surge elevated the company’s market capitalization beyond $50 billion, a milestone largely attributed to its robust financial performance and strategic positioning in the AI server domain, further enhanced by its strong partnership with Nvidia.

CompanyTickerAverage Weight (%)Return Contribution (%)
MicroStrategy IncMSTR3.574.13
Coinbase Global IncCOIN4.072.18
Super Micro Computer IncSMCI3.511.29
Robinhood Markets IncHOOD1.980.98
NVIDIA CorpNVDA3.380.83
Celsius Holdings IncCELH1.340.67
Marathon Digital Holdings IncMARA0.570.64
Carvana CoCVNA1.410.57
Advanced Micro Devices IncAMD3.180.35
PayPal Holdings IncPYPL2.940.34

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

During the recent Period, electric vehicle (EV) manufacturers Lucid Group Inc (NASD: LCID), Rivian Automotive Inc (NASD: RIVN), and Tesla Inc (NASD: TSLA) experienced notable declines in their stock performance. LCID’s stock dropped by 25% as the company missed quarterly revenue targets and reported significant cash burn, further impacted by its production guidance falling short of expectations. RIVN’s shares reached a new low after announcing underwhelming fourth-quarter results, including a 10% reduction in its salaried workforce, prompting sharp analyst downgrades. Meanwhile, Boeing (NYSE: BA) saw a 13.4% decrease in its stock value, largely attributed to persistent safety and quality concerns following new incidents involving its passenger jets, which have heightened scrutiny and affected the company’s reputation.

CompanyTickerAverage Weight (%)Return Contribution (%)
Lucid Group IncLCID2.56-0.76
Rivian Automotive IncRIVN1.55-0.71
Affirm Holdings IncAFRM1.03-0.51
Tesla IncTSLA2.74-0.44
Boeing Co/TheBA2.69-0.38
SoFi Technologies IncSOFI2.85-0.37
Paramount GlobalPARA1.81-0.28
Apple IncAAPL2.71-0.24
Roku IncROKU0.44-0.19
Unity Software IncU0.56-0.13

Source: BUZZ Holdings ULC, Bloomberg. Past performance is no guarantee of future results. Index performance is not illustrative of fund performance. Not intended as a recommendation to buy or to sell any of the securities mentioned herein.

BUZZ Index March 2024 Rebalance Highlights

Lyft, Inc.

Lyft Inc’s (NASD: LYFT) Q4 earnings report last month was highlighted by strong performance and optimistic guidance. Initially, Lyft’s earnings were notable for a significant reporting mishap, where EBITDA margins were incorrectly stated as 5% rather than the accurate 0.5%, leading to a dramatic 70% spike in Lyft’s shares during after-hours trading until the company issued a correction. Although this mistake led to a flurry of social media ridicule, focus quickly returned to Lyft’s solid earnings. In a ride-sharing industry where profitability has been challenging, Lyft reported a 4% increase in revenue and significantly narrowed its losses from -$588 million in Q4 2022 to just -$26 million in the recent quarter. With margins expected to improve, Lyft is on track to be free cash flow positive this year. This turnaround in performance has notably boosted sentiment toward LYFT, culminating in its recent addition to the BUZZ Index with a 1.4% weight.

Rivian Automotive, Inc.

After years of hype and excitement in the electric vehicle industry led by the surge of Tesla (NASD: TSLA), the environment for EVs has soured over the past year. The major traditional automakers, who had rushed to electrify their existing lineups, were having trouble recouping costs amidst declining demand for their vehicles. Dedicated EV automakers, such as Lucid (NASDAQ: LCID) and Rivian (NASDAQ: RIVN), who had finally started to mass produce their cars, were dealing with production obstacles and difficulty bringing down prices. Nevertheless, online sentiment towards RIVN and LCID has remained high, evident in the rising weights of these stocks within the BUZZ Index, even as they lagged following their recent earnings. On March 7th, RIVN announced its new R2 model in a planned reveal event. In a complete surprise however, Rivian also announced a second new model, the R3, which is expected to cost as little as $35,000 USD. The stock jumped on the announcement, and sentiment surged. This month RIVN climbs to a maximum 3% weight in the BUZZ Index.

For more on rebalancing results and a full breakdown of index constituents added and removed for the month, view the BUZZ Index reconstitution report.

To receive more Thematic Investing insights, sign up in our subscription center.

Important Disclosures

Company data is the source for all particular company information quoted.

Definitions: The S&P 500 is a stock market index of 500 of the largest companies listed on stock exchanges in the United States. The Nasdaq Composite Index is a stock market index that consists of the stocks that are listed on the Nasdaq stock exchange. S&P Banks Select Industry Index comprises stocks in the S&P Total Market Index that are classified in the GICS asset management & custody banks, diversified banks, regional banks, other diversified financial services and thrifts & mortgage finance sub-industries. Markit CDX North America High Yield Index represents one hundred liquid North American entities with high yield credit ratings as published by Markit. COBE VIX Index is a real-time market index representing the market’s expectations for volatility over the coming 30 days.

This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. VanEck does not guarantee the accuracy of 3rd party data. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.

An investment in the Fund may be subject to risks which include, among others, risks related to social media analytics, equity securities, medium-capitalization companies, information technology sector, communication services sector, consumer discretionary sector, market, operational, high portfolio turnover, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and index-related concentration risks, all of which may adversely affect the Fund. Medium-capitalization companies may be subject to elevated risks.

Investing in companies based on social media analytics involves the potential risk of market manipulation because social media posts may be made with an intent to inflate, or otherwise manipulate, the public perception of a company stock or other investment. Although the Sentiment Leaders Index provider attempts to mitigate the potential risk of such manipulation by employing screens to identify posts which may be computer generated or deceptive and by employing market capitalization and trading volume criteria to remove companies which may be more likely targets for such manipulation, there is no guarantee that the Sentiment Leaders Index’s model will successfully reduce such risk. Furthermore, text and sentiment analysis of social media postings may prove inaccurate in predicting a company’s stock performance.

An investor cannot invest directly in an index. Returns reflect past performance and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Certain indices may take into account withholding taxes. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown.

BUZZ NextGen AI US Sentiment Leaders Index (the “BUZZ Index”) is a product of BUZZ Holdings ULC (“BUZZ Holdings”), and has been licensed to Van Eck Associates Corporation for use in connection with the VanEck Social Sentiment ETF.

BUZZ” is a trademark of BUZZ Holdings, which has been licensed by Van Eck Associates Corporation for use in connection with the BUZZ Index.

VanEck Social Sentiment ETF is not sponsored, endorsed, sold or promoted by BUZZ Holdings, or its shareholders, or the licensor of the BUZZ Index and/or its affiliates and third party licensors. BUZZ Holdings makes no representation or warranty, express or implied, to the owners of the VanEck Social Sentiment ETF or any member of the public regarding the advisability of investing in securities generally or in VanEck Social Sentiment ETF, particularly or the ability of the BUZZ Index to track general market performance.

BUZZ Holdings’ only relationship to Van Eck Associates Corporation with respect to the BUZZ Index is the licensing of the BUZZ Index and certain trademarks of BUZZ Holdings. The BUZZ Holdings are determined and composed by BUZZ Holdings without regard to Van Eck Associates Corporation or the VanEck Social Sentiment ETF. BUZZ Holdings has no obligation to take the needs of Van Eck Associates Corporation or the owners of VanEck Social Sentiment ETF into consideration in determining and composing the BUZZ Index.

BUZZ Holdings are not responsible for and have not participated in the determination of the prices of VanEck Social Sentiment ETF or the timing of the issuance or sale of securities of VanEck Social Sentiment ETF or in the determination or calculation of the equation by which VanEck Social Sentiment ETF securities may be converted into cash, surrendered, or redeemed, as the case may be. BUZZ Holdings have no obligation or liability in connection with the administration, marketing or trading of VanEck Social Sentiment ETF. There is no assurance that investment products based on the BUZZ Index will accurately track index performance or provide positive investment returns. BUZZ Holdings is not an investment advisor and the inclusion of a security in the BUZZ Index is not a recommendation by BUZZ Holdings to buy, sell, or hold such security, nor should it be considered investment advice.

BUZZ HOLDINGS DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE BUZZ INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION WITH RESPECT THERETO, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS). BUZZ HOLDINGS SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. BUZZ HOLDINGS MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY Van Eck Associates Corporation, OWNERS OF THE VanEck Social Sentiment ETF, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BUZZ INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL BUZZ HOLDINGS BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN BUZZ HOLDINGS AND Van Eck Associates Corporation, OTHER THAN THE LICENSORS OF BUZZ HOLDINGS.

Effective August 18, 2016, BUZZ Indexes Inc. implemented changes to the BUZZ NextGen AI US Sentiment Leaders Index construction rules. The index constituent count was increased from 25 to 75 stocks and the maximum constituent weight was reduce from 15% to 3%. These change may result in more a diversified exposure to index constituents than under the rules in effect prior to this date. Past performance is no guarantee of future results.

The S&P 500® Index is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Van Eck Associates Corporation. Copyright© 2024 S&P Dow Jones Indices LLC, a division of S&P Global, Inc., and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. For more information on any of S&P Dow Jones Indices LLC’s indices please visit www.spdji.com. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. Neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors make any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and neither S&P Dow Jones Indices LLC, Dow Jones Trademark Holdings LLC, their affiliates nor their third party licensors shall have any liability for any errors, omissions, or interruptions of any index or the data included therein.

Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.

Van Eck Securities Corporation, Distributor, a wholly owned subsidiary of Van Eck Associates Corporation.

© 2024 VanEck. VanEck®, VanEck Access the opportunities®, and the stylized VanEck design® are trademarks of Van Eck Associates Corporation.

newETFs.io respects the hard work of others and gives all credit to the remarkable folks at ETFTrends.com. This excerpt/article was pulled from their RSS feed; click here to view the original. Please note that on occasion, the RSS feed will not have the author. When this happens this site defaults the author to "News". Make no mistake, this excerpt/article was not created by newETFs.io, it was simply shared with you.