Growth stock-related exchange traded funds rebounded on Friday as upbeat results out of Amazon.com and a surprisingly strong U.S. employment number helped fuel risk-on sentiment.
The fourth quarter earnings season for the technology segment has so far been a mixed bag with disappointing results out of Netflix, Paypal, and, more recently, Facebook’s parent Meta Platforms, but the weakness has been offset by positive news out of Apple, Microsoft, and now Amazon.
While many of the big tech-focused stocks are often thought of as a single group, “the divergence between Amazon and Meta Platforms’ earnings is an important reminder that each company is unique with its own set of problems and opportunities,” Julian Koski, chief investment officer of asset management firm New Age Alpha, said in a note to investors, according to Reuters.
“The best stocks are those that deliver the growth that is implied in their stock price, no matter what group or category the stock may be part of,” Koski added.
The Labor Department also announced its January jobs report, which showed that U.S. payrolls expanded by 467,000 for the month, despite troubles from a spike in the COVID-19 Omicron variant, the Wall Street Journal reports. In comparison, economists surveyed by the Wall Street Journal had projected 150,000 new additions.
Additionally, data for December was upwardly revised to 510,000 jobs created, compared to the previously reported 199,000.
“Employment report really stunned markets … not only did we have a surprisingly strong number, we had a very strong revision,” Edward Moya, senior market analyst at Oanda, told Reuters. “You also have average hourly earnings coming in much hotter than expected, which is just fueling the theme that everything is just leading to more inflation.”
Investors interested in the growth style can turn to targeted strategies like the American Century Focused Dynamic Growth ETF (FDG). FDG is a high-conviction strategy that invests in early-stage, rapid-growth companies with a competitive advantage and high profitability, growth, and scalability.
Additionally, investors can look to the American Century STOXX U.S. Quality Growth ETF (NYSEArca: QGRO). QGRO’s stock selection process is broken down into high-growth stocks based on sales, earnings, cash flow, and operating income, along with stable-growth stocks based on growth, profitability, and valuation metrics.
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