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.
- This week’s scorecard could very well have gone with just one line, at least judged by what moved the markets over the past few days. However, as is always the case, the other important market events will also be covered, along with the U.S. presidential election.
- Evidently, the news that Republican nominee Donald Trump will become the next U.S. president rocked markets all over the globe. Few were prepared for this outcome: the markets initially reacted negatively, but then reversed the trend, and the Dow Jones even reached all-time highs this week. Such is the optimism that Trump will be good for the economy.
- The U.S. economy added 161,000 jobs in October, below estimates of 178,000 and down from a revised 191,000 in September.
- Average hourly earnings rose 0.4% in October (against estimates of 0.3%), paving the way for higher consumer prices. The unemployment rate stood pat at 4.9%.
- China’s trade surplus grew to 325 billion yuan in October from 278 billion in the previous month, in another sign the Chinese consumer is dormant.
- In the U.S., oil rigs increased by 12 over the past week, but dropped by 14 in the rest of the world, excluding Canada.
- In the U.K., manufacturing production increased 0.6% in October compared to estimates of 0.5%. Previous figures stood at just 0.2%.
- There were 5.49 million job openings in the U.S. in the past month, below estimates of 5.67 million.
- Crude oil inventories rose 2.4 million barrels over the past week, after a 14.4 million rise in the previous week.
- Unemployment claims came in at 254,000 for the past week, below consensus of 263,000.
Risk Appetite Review
- The broad market (SPY ) was up 4.46% this week as investors unexpectedly cheered Donald Trump’s victory in the U.S. presidential election.
- High Beta ETF (SPHB ) was the best performer of the week with an astounding 8.12% rise, in a sign investors embraced risk.
- Low volatility (SPLV ) was the worst performer with just a 0.75% increase. Low volatility is one of the factors utilized in Smart Beta investing. For more information on the types of Smart Beta funds, read Smart Beta: Single Factor vs. Multi-Factor Approaches.
Major Index Review
- Markets were all up for the week, with the exception of emerging markets.
- iShares Russell 2000 Index (IWM ) has risen 7.98% this week, beating all other assets. Dow Jones (DIA ) followed closely with a 5.04% gain, as the index reached all-time highs following the news of Trump’s win. The index was the best performer of the month, rising 2.88%. For a deeper analysis on individual ETF investments such as (IWM ) or (DIA ), use our ETF Analyzer Tool. You can select ETFs by category or type as well as add individual ticker symbols to compare performance, expenses and dividend yield, among other metrics.
- Emerging markets were the only equities that dropped this week, as investors feared Trump’s protectionist policies will hurt these economies, particularly Mexico. iShares MSCI Emerging Markets (EEM ) tumbled 2.19% and was down 5.93% for the month.
Foreign Equity Review
- Foreign ETFs were mixed.
- Brazil (EWZ ) has again dropped like a stone this week, down 5.85%, as Donald Trump’s win failed to arrest last week’s decline. Trump’s pledge to renegotiate trade agreements was evidently not cheered by investors in the Brazilian stock market. Brazil has become the worst performer for the rolling month too, down 6.30%. Year-to-date, (EWZ ) remains up over 60%. Check out the previous ETF Scorecard: November 4 Edition to compare the performance of ETFs mentioned on a week-over-week basis.
- The best performer in the foreign market is, to no one’s surprise, Russia (RSX ), up 3.98%. The country’s equities gained on Trump’s apparent willingness to rebuild relations with Russia.
- For the rolling month, all equities were down. Japan (EWJ ) fell the least of all, just 0.66%.
- Commodities were mixed for the week.
- Copper (JJC ) was the best performer for the week, surging by an astonishing 14.16%, as Trump’s commitment to invest half a trillion dollars in the U.S.’s crumbling infrastructure made this commodity a hot asset. China’s new plan to spend on construction projects also boosted the metal. Copper is also the best performer of the month, with a 17.51% increase.
- Natural gas (UNG ) has again been the worst performer of the week, with a 4.03% decline on forecasts of warm weather and weak demand. Storage levels increased by 54 billion cubic feet last week, above forecasts of 53 billion. Natural gas is down 22.64% for the rolling month, representing the worst performance of the bunch. For more on how energy ETFs will be affected by a Trump presidency, read How Will Energy ETFs Be Affected by Donald Trump’s Win?.
- The dollar was king this week.
- The U.S. dollar (UUP ) has been the best performer this week, rising 1.63% on investors’ confidence Trump’s policies revolving around an increase in fiscal spending will boost the currency.
- For the rolling month, however, the British pound (FXB ) was king, rising 1.78%. This performance is largely due to the Bank of England’s promise not to raise interest rates this year and a court ruling that may delay Prime Minister Theresa May’s Brexit plans.
- The Japanese yen (FXY ) suffered the most, dropping 3.71%. Given its safe-haven status, the currency was not appealing during these risk-on times. The Japanese yen was also the worst performer for the rolling month, dropping 3.13%.
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Disclosure: No positions at time of writing.