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.
- 151,000 new jobs were added in January by U.S. employers. This was lower than the 190,000 the market was expecting. However, wage growth increased more than was forecasted. Additionally, the unemployment rate decreased to 4.9%, the lowest number in eight years.
- In a recent talk that took place on Wednesday, Federal Reserve Chairwoman Janet Yellen stated that volatile markets can slow down the economy and cool down monetary policy. She highlighted that the Fed’s goal is to increase the employment rate as much as possible and achieve a 2% inflation rate. Finally, she pointed out that the decision to increase rates will be made only when the economic data suggests it and not on a gradual and regular basis like it was done in the Greenspan era.
- The labor market showed signs of solidity this week. Jobless claims totalled 269,000, which was less than the 281,000 economists had predicted.
- U.S. crude oil fell 14% this week to $26.21 a barrel, while Brent fell 10% to $30.06 a barrel. U.S. crude oil is at its lowest level in the past 12 months. Goldman Sachs predicted that oil could remain in the $20-$40 range during the first semester of this year.
- Earnings seasons aren’t likely to boost the market. To date, two-thirds of the S&P 500 companies have reported their Q4 results. It is estimated that earnings will be down 5.8% when all companies report their earnings, according to Sheraz Mian, Zacks’ director of research.
- The People’s Bank of China reported that its foreign currency reserves fell $99.5 billion last month. The bank has lowered its foreign currency reserves to increase the yuan’s value and prevent investors’ money from flowing to other markets. China currently holds $3.23 trillion in foreign currency, the largest reserve in the world. However, this has decreased by $420 billion in the last six months and is at its lowest point since mid-2012.
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Risk Review Appetite Review
- The overall market as measured by the S&P 500 ETF (SPY ) was down by 4.26% for the week.
- The High Beta ETF (SPHB ) was the worst performer in the group with an 8.28% loss for the week.
- The Low Volatility ETF (SPLV ) was the best performer in the group with a 2.13% loss for the week.
Major Index Review
- The S&P 500 ETF (SPY ) was the best performer for the week with a 4.26% loss. The emerging-markets ETF (EEM ) was the best performer for the rolling month, down only 3.26%.
- The iShares MSCI EAFE Index Fund ETF (EFA ) was the worst performer for the week with a 5.57% loss.
- The iShares Russell 2000 Index ETF (IWM ) was the worst performer for the rolling month with a 9.04% loss.
- Countries such as Japan and Sweden have adopted negative interest rates to boost economic growth. However, banks have been affected by that move, causing a downfall in the stock market as a whole.
Foreign Equity Review
- All foreign tracking ETFs were down for the week.
- The best performer for the week was the iShares MSCI Germany Index Fund ETF (EWG ) with a 4.59% loss.
- The Market Vector Russia ETF Trust (RSX ) was the best performer for the rolling month with a 1.78% loss.
- The WisdomTree India Earnings Fund ETF (EPI ) was the worst performer for the week and the rolling month with 7.90% and 12.59% losses, respectively.
- Commodities had mixed results this week.
- The SPDR Gold Trust ETF (GLD ) was the best performer for the week and the rolling month, up 8.44% and 12.88%, respectively.
- The United States Oil Fund LP ETF (USO ) was the worst performer for the week, down 11.59%.
- Natural gas (UNG ) has declined the most out of the major commodities for the rolling month; it is down 18.62%.
- Gold went up 4% on Thursday and reached $1,247.98 per ounce, the highest price it has seen in the last 12 months. Financial uncertainty signalled by poor banking performance in Europe, the high costs of credit, a lower dollar, and a slow Chinese economic growth rate pushed investors to gain exposure to this precious metal.
- Major currencies had mixed results this week.
- The Japanese yen (FXY ) was the best performer for the week and the rolling month with gains of 4.33% and 4.85%, respectively.
- The U.S. dollar (UUP ) was the worst performer for the week and the rolling month with a 1.51% and a 3.27% loss, respectively.
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Disclosure: No positions at time of writing.