ETF Scorecard - January 8 Edition

• U.S. markets are down in the first week of the year.

• All major foreign markets, including developed and emerging markets, are bearish for the week.

• The spotlight this week is on the newly introduced circuit breakers on China’s Shanghai Composite exchange introduced on January 1. When the Shanghai Composite Index falls by more than 5% on a given day, trading ceases for 15 minutes. When it falls by 7% or more, this circuit breaker stops trading for the rest of the day. It was activated twice this week, on Monday and Thursday, which sent a global panic in the markets. Since the markets didn’t take this new development well, the circuit breaker has been discontinued going forward.

• Other news from China is the Caixin manufacturing PMI released on Sunday, which was a worse-than-expected figure of 48.2, compared to a consensus of 48.9. This triggered the early sell-off in the Chinese markets.

• On the domestic front, the leading economic indicator, ISM Manufacturing PMI, fell below expectation with the reported figure of 48.2 vs. the consensus of 49.1 on Monday’s release. This points to a slowdown in economic productivity.

• Further tensions between Iran and Saudi Arabia didn’t help the markets this week either; they may have magnified the volatility even more. In these conflicts, oil prices usually tend to increase; however, this was not the case this week. WTI oil hit a 12-year low to less than $33 a barrel.

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• The overall market as measured by the S&P 500 ETF (SPY A) was down significantly this week, with a 3.21% decrease.

• The low volatility ETF (SPLV A+) fell the least, by 2.05% for the week. This is because volatility was really high this week, and this ETF is designed to mitigate those extreme fluctuations.

• The high-beta ETF (SPHB B+) is the outlier, with a huge loss of 6.47% for the week.

• All major indexes are down more than 3% for the week and more than 7% for the month.

• Given the negative sentiment in the Chinese markets, it’s no wonder the Emerging Markets ETF (EEM A-) is the worst performer for the week and the rolling month, with 4.85% and 11.11% losses, respectively.

• The smallest declines were in the S&P 500 (SPY A), with losses of 3.21% and 7.26% for the week and rolling month.

• All major foreign tracking ETFs are down for the week and rolling month.

• Again, it is clear the Chinese ETF (FXI A) is the worst performer for the week, with a loss of 6.41%.

• The Japanese ETF (EWJ A) fell the least for the week, with a loss of 1.68%.

• The Indian ETF (EPI C+) is holding on and not doing as badly as the other emerging markets, with a loss of only 2.39% for the rolling month.

• With all the conflicts and sanctions in Russia, the Russian ETF (RSX B) continues to decline, and is the worst performer for the rolling month, with a loss of 19.41%.

• As mentioned earlier, oil is in decline this week, and is the outlier of the major commodities. The oil ETF (USO B) is down 12.08% and 17.64% for the week and rolling month, respectively.

• As global markets tumble this week, investors are looking for safety, which is the reason gold (GLD A-) is the best performing commodity for the week, with a gain of 2.93%.

• Natural gas (UNG B-) is the best performer for the rolling month, with a gain of 6.87%.

• The U.S. dollar (UUP B) is down for the week and rolling month, with declines of 0.55% and 0.74%, respectively.

• The Japanese yen (FXY C) has outperformed all other major currencies for the week and rolling month, with gains of 1.39% and 4.94%, respectively.

• The Australian dollar (FXA B+) is the worst performer for the week and rolling month, with losses of 0.96% and 3.76%, respectively.

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Disclosure: No positions at time of writing.