ETF Express: Week Ending 1 September 2023

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

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• Risk-on investments (CRYP, GEAR, GGUS, LNAS, LPGD) dominated the top performers list last week as mixed data in the US’s latest jobs report buoyed market sentiments. Non-farm payrolls grew 187,000 in August; however, unemployment also rose 3.8% - indicating that US employment may be nearing capacity as supply and demand become more balanced.¹ Investors reacted positively as a slowing job market should translate into lower inflation and, in turn, softer monetary policy.
• Short equity funds (BBOZ, BBUS, BEAR, SNAS) were the poorest performers as markets rallied across the board. Traders are predicting the Federal Reserve will keep rates unchanged in September and November.²
• There were $1.25 billion in reported inflows for the week, and only $221 million in outflows, marking a big week of net inflows for the Australian ETF industry.

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Apple Brings 3D Printing into Manufacturing Mainstream

Robotics and Automation

Electronics giant Apple Inc. (Apple) is reportedly testing out 3D printing as part of their manufacturing process.³ Apple’s revolutionary approach could mark the beginning of a new era for manufacturing as one of the first cases of high-volume, 3D printing production.⁴

Apple’s new manufacturing technique will be trialled on the steel chassis of a small selection of their upcoming smartwatches. A 3D printing method called ‘binder jetting’ will be utilised to create a rough outline of the wearable device, known as “near net shape”. The approximation will then be condensed through heat and pressure into a material similar in quality to traditional steel, before being refined through traditional milling. According to Bloomberg, Apple has been testing the process on the Apple Watch Series 9, set to be unveiled on September 12th, while plans also exist to implement the process to its Titanium Ultra series in 2024.⁵

Apple says their new approach will be beneficial on many fronts. First and foremost, 3D printing promises to reduce production times, increasing efficiency across the supply chain. Furthermore, removing the need to cut designs from large slabs of metal should dramatically reduce material waste and improve sustainability.⁶

3D printing and automation companies 3D Systems Corp. and Stratasys Ltd. jumped as much as 10% upon the news.⁷ Investors are keen to see the results of Apple’s trial as success could have dramatic implications for the future of automation and manufacturing.

Capture the robotics and automation opportunity with ROBO.

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Crude Oil

Bullish

• A significant drop in US crude stocks: According to EIA data, US crude stockpiles decreased by 10.6 million barrels last week, considerably above predictions for a 3.3-million-barrel decline.⁸
• Expectations that OPEC+ leaders might maintain a tight global supply: Although no official decision has been taken, there are rumours that Saudi Arabia and Russia may continue their output and export restrictions until October.⁹

Bearish

• Sanctions relief could boost Venezuelan production to just short of 1.1 million barrels a day by the end of 2024, with most of those barrels coming to the US.¹⁰
• Iran’s oil exports ballooned in August: Iran has been steadily ramping up its oil shipments this year, finding buyers for its discounted supplies in Asia. The country’s production is now at the highest level since a ban on its exports kicked in five years ago, with US officials privately acknowledging they’ve gradually relaxed enforcement on some of the measures.¹¹

Explore crude oil opportunities with BCOM.

Precious Metals

Bullish

• Weaker-than-expected US economic statistics increased betting on the Federal Reserve adopting a less aggressive policy. The largest economy in the world grew less than anticipated in the second quarter, and private job growth slowed to a 5-month low, indicating a softening in the labour market.¹²
• A weaker dollar and falling US Treasury yields may lessen pressure on non-yielding precious metals.

Bearish

• Price pressures eased at a slower rate in Germany and inflation increased in Spain, opening the door for further ECB tightening.

Explore the precious metals opportunity with GOLD.

Uranium

Bullish

• Iraq is considering constructing a limited nuclear reactor for peaceful purposes. The reactor would produce clean electricity, reducing reliance on other power sources like oil and gas and could have positive long-term impacts on power stability.¹³
• Anticipated milder temperatures in Europe that make it easier to use the natural cooling water sources required for nuclear energy production.

Bearish

• The release of radioactive water in the decommissioning of Fukushima by Tokyo Electric Power Company (Tepco) is facing severe backlash from the Chinese government, with seafood imports from Japan being banned across the board.¹⁴

Explore the potential of uranium with ATOM.

^{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 1st September 2023.}