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.
- Monetary policy was at the top of the agenda this week, as Federal Reserve Chair Janet Yellen testified before Congress in her semi-annual address. The Fed chief stoked fresh gains on Wall Street by telling lawmakers that monetary policy will be slow to change in the coming years.
- Yellen also expressed deeper worry over slowing inflation, something analysts say could deter the central bank from raising interest rates in a more aggressive fashion.
- The Dow Jones Industrial Average and Nasdaq Composite Index rose to record highs this week, while the S&P 500 approached its highest level in nearly one month.
- The CBOE volatility gauge fell below 10.00. The so-called fear index trades on a scale of 1-100, where readings below the 20 mark indicate complacency in the market.
- Dovish Fed-speak also sent European stocks higher on Wednesday, with the major bourses enjoying their best one-day advance in two-and-a-half months.
- In commodities, oil prices rose to more than one-week highs on signs of better demand. U.S. West Texas Intermediate (WTI) futures settled above $46.00 a barrel on Thursday. Earlier in the week, the U.S. Energy Information Administration (EIA) said commercial crude stockpiles fell by 7.56 million barrels in the week ended July 7.
- Encouraged by a rebounding economy, the Bank of Canada (BOC) raised interest rates on Wednesday for the first time in nearly seven years. In doing so, Canada becomes only the second G7 nation to begin normalizing monetary policy.
- The BOC rate hike sent the Canadian dollar to nearly one-year highs against the greenback, which declined against a basket of world currencies through the week.
- China’s trade surplus widened more than expected last month even as import growth outpaced exports, official data showed. Beijing’s dollar-denominated trade surplus grew to $42.77 billion in June from $40.79 billion the month before.
- To keep track of all the latest market news and analysis, visit ETFdb’s News section.
Risk Appetite Review
- Investors’ risk appetite returned this week, as global equities received large bids following Yellen’s testimony.
- High Beta (SPHB ) was the best performer, rising 2.45% during the week.
- Equal-weighted indices (RSP ) and large-cap S&P 500 (SPY ) also posted solid gains, rising 1.43% and 1.33%, respectively.
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Major Index Review
- Equities rose across the board in the week leading up to Thursday, with emerging markets leading the rally. The iShares MSCI Emerging Markets Index (EEM ) rose 4.18% over the past five days.
- Wall Street also booked solid returns, with the PowerShares Trust ETF (QQQ ) gaining 3.12% and the SPDR Dow Jones Industrial Average ETF (DIA ) adding 0.9%.
- The iShares MSCI EAFE Index Fund (EFA ) gained 1.87% over the past five days, but continued to trade in the red compared to last month.
- On a sectoral basis, all the major verticals posted gains this week, with the exception of consumer staples. The Consumer Staples Select Sector SPDR Fund (XLP ) declined 0.55%.
- Technology shares (XLK ) rebounded sharply this week, rising for five straight sessions on route to a 3.26% gain. Tech shares were at the center of volatility last month as investors cycled out of the sector. To explore the world of Technology ETFs, click here.
- Other strong performers this week included Materials (XLB ), Energy (XLE ) and Consumer discretionary (XLY ), which rose between 1.47% and 1.89%.
- Health stocks (XLV ) also advanced 0.62% as lawmakers battled to repeal Obamacare.
- Aerospace was trending this week. To learn about the latest market moves, check out ETFdb.com’s latest Trending article.
Foreign Equity Review
- Foreign equities followed Wall Street higher this week, with emerging and advanced markets posting solid returns. Brazilian stocks (EWZ ) were by far the strongest gainers, adding 6.53% in the five days through Thursday.
- Chinese (FXI ) and Russian (RSX ) equities also booked solid gains, rising 4.46% and 4.35%, respectively.
- To explore ETFs based on country exposure, refer to our ETF Country Exposure tool. Select a country from a world map and get a list of all ETFs tracking your pick.
- Crude oil posted solid gains, as summer demand boosted the black commodity. The United States Oil Fund LP (USO ) was this week’s top performer, gaining 3.05%. The weekly gains helped to offset most of crude’s monthly decline and restricted month-over-month losses to 0.42%.
- Natural gas also rose, with (UNG ) adding 0.91% for the week.
- Use our Head-to-Head Comparison tool to compare two ETFs such as (USO ) and (UNG ) on a variety of criteria such as performance, AUM, trading volume and expenses.
- On the opposite side of the ledger, it was a mediocre week for precious metals, as Silver (SLV ) attempted to recover from last Friday’s flash crash. It traded down 0.54% in the week to Thursday. Meanwhile, Gold (GLD ) was flat for the week, gaining a mere 0.03%.
- U.S. dollar pairs took advantage of a tumbling greenback, as investors maintained a subdued outlook on the world’s largest economy. Bullish positions on the U.S. dollar (UUP ) largely underperformed, falling 0.32%. With that decline, the dollar has returned -1.28% over the past month.
- The Australian dollar (FXA ) was the week’s best performer, gaining 1.68%.
- The WisdomTree Dreyfus Emerging Currency Fund (CEW ), which provides broad exposure to money market instruments and currency movement in emerging markets, rose 1.17% for the week.
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Disclosure: No positions at time of writing.