ETF Express: Week Ending 29 September 2023

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

 

  • Uranium ETFs (ATOM, URNM) were the top performers last week as uranium spot prices surpassed US$70 per pound for the first time since 2011. Uranium’s rally has been driven by a range of factors including supply shortage, decreased output forecasts and increased global demand.1
  • Gold miner ETFs (GDX, MNRS) were the poorest performers as gold suffered six straight days of decline, its longest losing streak in over 13 months.2 Traders are increasingly concerned over the potential of rates staying higher for longer, and treasury yields sitting near 16-year highs puts further pressure on precious metals prices.3
  • There were $398 million in reported inflows for the week, and only $40 million in outflows, marking a strong week of net inflows for the Australian ETF industry.

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Writers Win in Blockbuster End to Hollywood Strike

Streaming and Entertainment

Streaming studios, including Disney and Netflix, have reached a deal to resolve one of the longest strikes in Hollywood’s history.4 The five-month standoff between the Screen Actors Guild (SAG-Aftra) and the Alliance of Motion Picture & Television Producers (AMPTP) is nearing its final act as SAG-Aftra announced last week that they have reached an “exceptional” labour agreement, with “meaningful gains and protections for writers in every sector”.5

Despite finding a middle ground, production is expected to remain on hold as a return to filming will require new contracts between the two opposing parties. The total cost of the writing stoppage that started in May is expected to easily eclipse the estimated US$2 billion loss that the industry saw in 2007 as a result of a three-month strike.6 Markets have reflected the sentiment. Major streaming studios Disney, Warner Bros. Discovery and Paramount Global lost a combined market capitalisation of roughly US$50 billion since May.7 Plus, with production still on hold, this year’s fall season TV as well as films for 2024 will continue to be impacted.

The writer’s union is expected to authorise member voting as soon as this week. Late-night talk shows and soap operas will be the first to return. Analysts expect other mediums such as movies, TV shows and big-budget productions to also resume in a relatively quick fashion, bringing entertainment pipelines across the industry back online.

Explore US Markets with N100.

 

Uranium

Bullish

  • The U308 Spot price has reached $59.93 per pound, breaking the decade-high-level set in March 2022. Uranium spot prices are now the highest since 2011, following the Fukushima nuclear disaster.8
  • Holtec International is moving forward with plans to restart a nuclear power plant in Michigan after a local power company agreed to purchase as much as two-thirds of the site’s output.9
  • The World Nuclear Association’s latest biennial report predicts a 28% surge in demand for uranium used in nuclear reactors by 2030 and nearly doubling by 2040, driven by governments increasing nuclear power capacity to meet zero-carbon targets.10

Bearish

  • Rosatom, the Russian state nuclear corporation, clarified that it hasn’t halted uranium exports, contrary to earlier reports indicating a halt due to insurance coverage issues.11
  • The International Atomic Energy Agency (IAEA) may soon face a shortage of funds for monitoring the world’s nuclear stockpiles due to non-payment by the US, China, and others, marking another point of contention in the global influence struggle between Washington and Beijing.12

Explore uranium with ATOM.

Gold

Bullish

  • Ghana’s reserves have received a boost of approximately $1.5 billion through gold purchases. The central bank acquired about 13.7 tons of gold to bolster reserves and support oil imports.13
  • Hedge fund managers have increased their net bullish gold bets to a 6-week high, adding 16,843 net-long positions, bringing the total to 66,639, according to weekly CFTC data on futures and options.14

Bearish

  • Gold has declined for six consecutive sessions, breaking below a key technical support level. Despite a supportive decline in the dollar, the metal fell by as much as 0.9% on Thursday. This drop took it below the important $1870-an-ounce mark flagged by analysts as a significant technical level.15

Explore physical gold with GOLD.

Copper

Bullish

  • Goldman Sachs notes that China’s economic challenges haven’t reduced its demand for commodities.16 Chinese purchases of copper, iron, and oil have all exceeded expectations this year.
  • France has signed a deal on critical minerals with Canada and Australia, focusing on a “strategic dialogue” concerning critical minerals, including copper.17

Bearish

  • LME copper’s market momentum continues to exhibit bearish signals.

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 3rd October 2023.