To help investors keep up with the markets, we present our ETF Scorecard. The Scorecard takes a step back and looks at how various asset classes across the globe are performing. The weekly performance is from last Friday’s open to this week Thursday’s close.
- The bond market gave a warning sign about a possible recession in the near future when the 10-year yield fell below 1.90%. The yield curve is at its flattest point in the last eight years. Every time there has been an inverted yield curve in the U.S. it has been followed by a recession. Investment banks, including Morgan Stanley and Citi, stated that it’s highly likely that there will be either a U.S. or a global recession in 2016.
- According to the Labor Department, nonfarm productivity fell to a 3% annual rate, the largest drop over the last two years.
- The number of people filing for unemployment benefits in the U.S. increased to 8,000 last week, which was more than expected. Additionally, retailers stated they plan to cut over 22,000 jobs, the highest number of cuts since 2009.
- This morning, the Bureau of Labor Statistics released the nonfarm employment change figures, and the results were worse than expected, with 151,000 new jobs added, compared to the expected 189,000.
- The U.S. stock market recovered after the price of U.S.-produced oil increased to $33.09 per barrel on Wednesday. The price of oil dropped to $31.68 earlier this week.
- Spot gold reached $1,147.40 an ounce, the highest price in three months as the Fed announced they don’t plan to increase interest rates just yet.
- European companies that rely on selling commodities received a boost due to the weak dollar increasing the purchasing power of individuals and institutions that aren’t dollar-based. The STOXX Europe 600 Basic Resources Index rose 3.9%, while the Pan-European FTSEurofirst 300 increased 0.5%.
- Chinese markets are up over 1% this week due to the weakening dollar preventing the yuan’s depreciation. The CSI Index went up 1.2% and the Shanghai Composite Index increased 1.6%.
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Risk Appetite Review
- The overall market as measured by the S&P 500 ETF (SPY ) was slightly up by 0.83% for the week. It was also the worst performer of the group this week.
- The Equal Weight (RSP ) was the best performer in the group with a 1.67% gain for the week.
Major Index Review
- The SPDR Dow Jones Industrial Average ETF (DIA ) was the best performer for the week with a 1.57% gain.
- The iShares MSCI Emerging Markets Index ETF (EEM ) was the best performer for the rolling month with a 3.16% loss.
- The PowerShares QQQ ETF (QQQ ) is the worst performer for the week with a 0.34% loss.
- The iShares Russell 2000 Index ETF (IWM ) is the worst performer for the rolling month with an 8.87% loss.
Foreign Equity Review
- Foreign tracking ETFs had mixed results this week.
- The best performer for the week and rolling month was the iShares MSCI Brazil Index ETF (EWZ ) with a 7.93% and a 1.13% gain, respectively.
- The iShares FTSE/Xinhua China 25 Index (FXI ) was the worst performer for the week and the rolling month with a 2.98% and 12.27% loss, respectively.
- The Chinese yuan will likely continue to depreciate due to slow economic growth in China.
- Commodities had mixed results this week.
- The iShares Silver Trust ETF (SLV ) was the best performer for the week, up 4.73%.
- Gold (GLD ) was the best-performing major commodity for the rolling month, up 7.21%, while oil (USO ) was the worst-performing commodity, down 19.01%.
- The United States Natural Gas Fund, LP (UNG ) was the worst performer for the week with a 12.92% loss.
- Commodities, excluding oil and gas, went up due to a weak dollar, which increased the purchasing power of individuals and institutions located outside the U.S.
- Almost all major currencies, except the U.S. dollar, are up for the week. The U.S. dollar (UUP ) was the worst performer of the week and the rolling month with a 2.94% and a 2.30% loss, respectively.
- The Japanese yen (FXY ) was the best performer for the week with a gain of 3.87%.
- The euro (FXE ) was the best performer for the rolling month with a gain of 3.23%
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Disclosure: No positions at time of writing.