ETF Express: Week Ending 20 October 2023

ETF Express is Global X’s weekly coverage of the latest ETF Market Moves, Thematic Spotlight and Commodity Calls.

 

  • Bitcoin ETFs (EBTC) rallied to the top of the performers list last week as BlackRock’s spot Bitcoin ETF showed signs that it’s approaching launch. A ticker for the bitcoin trust, IBTC, has been listed on the Nasdaq’s market clearer, and a seed investor has been hinted at in its SEC filing.1
  • Energy transition ETFs (ERTH, GMTL, HGEN, TANN) tumbled last week as solar industry bellwether SolarEdge Technologies issued a sales warning that demand in Europe had significantly weakened.2 Clean energy stocks also fell broadly as 10-year US Treasuries flirted with 5% yields, with higher interest rates making it more costly to fund the investment reliant sector.3
  • There were $405 million in reported inflows for the week, and only $95 million in outflows, marking a strong week of net inflows for the Australian ETF industry.

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Netflix Surges as Subscriber Growth Returns

Streaming and US Markets

Netflix Inc. smashed analyst expectations last week after reporting an influx of 8.76 million new customers, its biggest quarterly increase since 2020.4 Geographically, Europe, the Middle East, and Africa contributed almost half of the new viewers.5 The streaming giant accredited the growth to its new policies against password sharing that went live across the world in May.6

The positive report saw Netflix shares surge by 15.87% on the day, closing at US$401.12.7 With fresh wind in its sails and proof of success for its paid sharing plan, the company has announced it will look to increase prices for customers in the US, UK, and France. In the US, the most expensive family plan will now cost US$23, up by US$3, and the basic plan sees a US$2 hike to US$12.8 The move underscores management’s confidence in the company’s value proposition, especially at a time when rival streaming services are grappling with financial woes and poor content pipelines due to industry strikes.

For the coming quarter, Netflix has forecast a revenue of US$8.69 billion and earnings of US$2.15 per share, both slightly below Wall Street’s projections.9 However, analysts expect the momentum from the sharing crackdown will likely remain a growth driver for a while longer.

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Hydrogen

Bullish

  • The US government has announced seven regional clean hydrogen hubs that have been selected to receive up to US$7 billion collectively in funding from the Infrastructure Investment and Jobs Act.10 The funding aims to accelerate the development of a domestic clean hydrogen industry, with a target of producing more than 3,000,000 tonnes of hydrogen per year – equivalent to one third of the country’s hydrogen production goal for 2030.
  • Germany is looking to accelerate the development of hydrogen infrastructure, potentially through an acceleration law that could be passed by the end of the year.11 If passed, this law could complement the other wide-ranging efforts that Germany’s government is using to establish hydrogen as a primary energy source within the country.

Bearish

  • McKinsey’s 2023 Global Energy Perspectives paper has listed green hydrogen as facing high risk of hitting investment bottleneck. The report states that a lack of energy infrastructure, consumer affordability, manufacturing capacity and investment willingness are all major factors which may limit the growth of clean energy technologies.

Explore hydrogen with HGEN.

Crude Oil

Bullish

  • The oil megadeal of the month will see Chevron acquire Hess for US$53 billion in an all-stock deal.12 The share price of US$171 represents roughly 5% premium over Hess’ Friday closing.

Bearish

  • Crude oil prices stabilised as international attempts at diplomatic intervention in the middle east increased in intensity.13 WTI crude prices fell as concerns surrounding possible supply disruptions of middle eastern oil producers cooled. Egypt began sending aid convoys to Gaza over the weekend, while Israel agreed to hold off attacking Hamas under US pressure.

Explore crude oil with BCOM.

Copper

Bullish

  • Chinese GDP released last week topped analyst expectations, signalling that China’s economy is stabilising. GDP expanded 4.9% year-on-year and 1.3 % quarter-on-quarter, industrial output also rose 4.5%, above the median estimate.14

Bearish

  • Copper inventories rose sharply last month, despite long-term scarcity concerns.15
  • Industrial development may decelerate as the US economy shifts to higher interest rates, and debt-ridden Chinese property giants risk financial contagion for important resource buyers in Asia.

Explore copper with WIRE.

 

Forecasts are not guaranteed, and undue reliance should not be placed on them. This information is based on views held by Global X or referenced sources as at 24th October 2023.