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’s Thursday close.
- Global markets were up this week, with the U.S. indexes reaching new all-time highs.
- Positive sentiment struck vigorously as a bumper jobs report of 287,000 in the U.S. for last month eased concerns about the health of the economy.
- All eyes have been on Britain again: David Cameron resigned much earlier than previously announced, leaving the Prime Minister spot to Theresa May, who made it clear that Britain will leave the European Union.
- At the first meeting following Brexit, the Bank of England decided to stay still and keep interest rates at the same level of 0.50%, surprising the markets. However, it strongly hinted that a stimulus package will likely follow in August.
- Unemployment claims in the U.S. again came in lower than expected – 254,000 versus 265,000 – confirming the American economy is on strong footing, despite macro headwinds abroad.
- Hard landing outcome in China has been avoided, at least for now. Last quarter, the Chinese economy grew 6.7% versus the 6.6% forecast, and industrial production in the last month edged up 6.2%.
- But that’s not the whole picture. Chinese exports fell 4.8% in June in dollar terms after declining 4.1% in May and 1.8% in April. Imports dropped even more, about 8.4% year-over-year, after plunging 0.4% in May.
- In Japan, the current Prime Minister won a landslide victory in upper house elections last weekend, after which he promised new fiscal stimulus measures. Markets cheered the news.
For more ETF news and analysis, subscribe to our free newsletter.
Risk Appetite Review
- The broad market is up this week, with the S&P 500 ETF (SPY ) jumping 2.40% as investors applauded news of new stimulus from developed world central banks and a strong jobs report at home coupled with easing worries about China.
- Low Volatility ETF (SPLV ) was slightly up since last Thursday, by 0.54%.
- The high beta ETF (SPHB ) has had the best performance of the bunch, jumping 5.40%, after being the worst performer over the past several weeks on Brexit concerns. This week, investors evidently switched to risk-on mode.
Major Index Review
- Major indexes have risen this week, with a few of them reaching new all-time highs, leaving many investors befuddled.
- Emerging markets (EEM ) have posted the best performance for the week and rolling month, rising 4.74% and 8.53%, respectively, as Chinese data showed concerns about a hard-landing scenario proved overblown.
- The S&P 500 (SPY ) has had the worst performance for the week, rising 2.40%. However, that is hardly a negative: the index hit new all-time highs this last week as investors were optimistic about U.S. prospects following the upbeat jobs report.
- The iShares MSCI EAFE Index Fund (EFA ) is the worst performer for the rolling month, with a 2.73% gain. The fund has heavy exposure to Japan and Europe, with the latter likely proving a drag on performance. For the week, however, the fund was the second best performer, reflecting a strong Japanese stock market following Abe’s stimulus remarks.
Foreign Equity Review
- All foreign ETFs are up since last Thursday, after largely dropping in the previous week.
- The best performer for the week and rolling month is Brazil (EWZ ), which edged up 6.24% and 18.43% respectively, extending a rally started in March on an improved political landscape in the country coupled with upbeat global market sentiment. Brazil’s lower house is likely to elect a speaker supportive of the President’s proposal to cut the budget deficit, making investors optimistic about the country’s stock market.
- The worst performer for the week is India (EPI ), up 3.67%, as the index continued its recovery following a nasty Brexit sell-off.
- For the rolling month, Germany (EWG ) remains the worst performer, with a 1.35% gain, dragged down largely because of the flailing banking stocks, which – along with their much-worse positioned Italian peers – may conjure up a pan-European banking crisis.
- Commodities have posted mixed performance for the week.
- Copper (JJC ) has risen the most this week, by 5.97%, largely on news of shipping delays from the world’s top producer Chile. A stormy weather has made it difficult for shipping companies to load cargos.
- Gold (GLD ) and Natural Gas (UNG ) are the worst performers for the week, both falling 1.94%. Gold has lost its safe-haven appeal after investors started flocking to risky assets again, while Natural Gas inched lower after data showed on Thursday that inventories were rising.
- Currencies have posted mixed performance for the week and rolling month, reflecting a risk-on sentiment.
- The British pound (FXB ) has recovered this week from an abrupt decline following the Brexit vote, growing the most, by 2.76%. It remains, however, the worst performer for the rolling month, with a 5.88% loss.
- The Japanese yen (FXY ) is the worst performer of the week, dropping 4.60%, largely on news about new stimulus measures from the Japanese Prime Minister and investors’ flight to risky assets.
- For the rolling month, emerging currencies (CEW ) have increased the most, posting a 3.67% gain.
For more ETF analysis, make sure to sign up for our free ETF newsletter.
Disclosure: No positions at time of writing.