The S&P 500 posted its best third-quarter gains since 2010 with an advancement of 8.5%, led by the gains in the consumer discretionary sector. Overall, the third quarter of 2020 can be marked by a sturdy stock market rally at the start and then the usual September slowdown. Fiscal and monetary stimulus, coronavirus vaccine hopes, pent-up consumer demand and decent earnings releases kept global markets steady in July and August.
However, Wall Street recorded the first monthly decline in September since March. Doubts over a faster rollout of coronavirus vaccines, rising COVID-19 cases in the United States and Europe, reports of major banks engaging in transferring illicit funds, profit booking on tech stocks and pre-election volatility in the United States have spelt trouble for the markets. Overall, the S&P 500 recorded its best third-quarter this year since 2010.
Moreover, third quarter was all about huge M&A activities. ByteDance, TikTok’s Chinese owner, selected Oracle (NYSE:ORCL) to be its technology partner in the United States. Gilead Sciences, Inc. (NASDAQ:GILD) announced that it will purchase the oncology company Immunomedics (NASDAQ:IMMU). Nvidia (NASDAQ:NVDA) agreed to acquire the UK-based chip designer Arm Ltd from Japan's SoftBank Group. Such euphoria for deals in September resulted in a record third quarter with more than $1 trillion worth of transactions globally.
IPO market has probably witnessed the busiest third quarter since the dot-com years, per a MarketWatch article. More than 80 IPOs are expected to have raised $28.5 billion, according to Renaissance Capital Co-Founder and Chief Executive Bill Smith, as quoted on MarketWatch. No wonder, third quarter was upbeat for the broader market.
Against this backdrop, below we highlight a few winning ETFs and stocks of the S&P 500 index in the third quarter.
Winning Stocks
L Brands Inc (NYSE:LB). (LB) – Up 100.4% in the past 12 weeks.
The Zacks Rank #3 (Hold) L Brands evolved from an apparel-based specialty retailer to a segment leader focused on women’s and other apparel, personal care, beauty and home fragrance products.
FedEx Corporation (NYSE:FDX) FDX – Up 59.9% in the past 12 weeks
The Zacks Rank #1 (Strong Buy) FedEx Corporation is the leader in global express delivery services.
Advanced Micro Devices (NASDAQ:AMD) Inc. (AMD) – Up 54.5% in the past 12 weeks
The Zacks Rank #3 company has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider.
Winning ETFs
SPDR SP 500 ETF (SPY) – Up 10% past three months
The underlying S&P 500 Index is composed of five hundred selected stocks, all of which are listed on national stock exchanges and span over 25 separate industry groups. The Zacks Rank #2 fund charges 9 bps in fees (read: ETF Strategies to Gain From Vaccine Progress, M&A Deals).
Vanguard SP 500 ETF (VOO) – Up 10% past three months
The underlying S&P 500 Index measures the performance of the large-capitalization sector of the U.S. equity market. The Zacks Rank #2 fund charges 3 bps in fees.
iShares Core SP 500 ETF IVV – Up 10% past three months
The underlying S&P 500 Index measures the performance of the large-capitalization sector of the U.S. equity market. The Zacks Rank #2 fund charges 3 bps in fees.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report
FedEx Corporation (FDX): Free Stock Analysis Report
SPDR SP 500 ETF (SPY): ETF Research Reports
L Brands, Inc. (LB): Free Stock Analysis Report
iShares Core SP 500 ETF (IVV): ETF Research Reports
Vanguard SP 500 ETF (VOO): ETF Research Reports
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