ETFdb.com analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.
A relentless rally in the precious metals following a string of weak data from the U.S. generated traffic for silver miners and platinum, which are in the top of our weekly list. Meanwhile, Amazon (AMZN) released impressive earnings for the second quarter, pleasantly surprising analysts. Turning to a grimmer picture, Europe Financials and crude have attracted interest for their poor performance, with the wobbles of the European banks being on the lips of many in the investment community.
Silver Miners: Gaining From Fear
Silver has been relentlessly rising over the past week and month, boosting companies specialized in digging the metal out of the ground. Silver Miners have seen their traffic increase 270% this week compared to the same period a week ago, largely drawing attention for its stellar performance. For example, Silver Miners ETF (SIL ) has jumped more than 5% over the past five days, extending year-to-date performance to as much as 179%.
Silver, along with other precious metals such as gold and platinum, have been lifted following Britain’s shocking decision to leave the European Union. Silver has been the best performer of all, in line with its tendency to outperform peers in the bull market. In a bear market, silver usually underperforms. Investors piled into precious metals this week after soft data from the U.S. pushed bets for an interest rate hike even further and weakened the dollar. The U.S. economy rose 1.2% in the second quarter versus estimations of 2.5%. Even more worrying, the GDP number for the previous quarter was revised down from 1.1% to 0.8%. The weak data sparked speculation that the Federal Reserve will not raise interest rates soon, and may in fact cut them. The dollar weakened as a result, providing a further boost to silver.
Platinum: Catching Up
Platinum has seen its viewership rise 162% this past week, as the precious metal continued a rally on the back of worries surrounding the health of the global economy. Just like silver, platinum has been lifted by weak data coming from the U.S. and the Brexit. For instance, ETFS Physical Platinum Shares (PPLT ) has increased more than 2.5% over the past week, and is up more than 30% since the beginning of the year.
Platinum may continue its rally, as traders pile into the commodity because other precious metals may look relatively overvalued. Still, unlike gold for example, platinum has industrial uses as well, being heavily used in the car industry. If demand for cars slows down going forward, particularly given the weak global economy, platinum is sure to take a hit. Other catalysts, however, may remain in place. Interest rates are expected to stay lower for longer, and the dollar has been weakening of late.
Amazon: Turning a Corner
Online retail company Amazon (AMZN) has recently surprised analysts by posting a record quarterly profit, handily beating expectations. Amazon’s viewership has grown about 142% this past week compared to the week-ago period, as the latest financial results injected optimism the company may have turned a corner, and could transform itself from a money-losing entity to a profit-making business. Shares in the company have risen 1.3% this week, extending year-to-date gains to 11.6%.
For the second quarter, Amazon reported a profit of $857 million, or $1.78 per share on revenues of $30.4 billion. Analysts had expected earnings per share of $1.11 and income of $29.5 billion. This is the company’s fifth straight quarter of profits. The developments prompted investors to wonder whether the retailer is past its growth period and from now on will focus on the bottom line instead of the top line. On the conference call, CFO Brian Olsavsky somewhat squashed these speculations, saying the company still has a suite of investment opportunities, including doubling down on video content and opening up 18 new warehouses. He also said the bottom-line growth has been due to efficiencies in automating processes.
Europe Financials Index: Trouble Ahead
European banks have been in the limelight since the Brexit vote revealed the woes of the wider European banking sector. Some banks recently announced strong earnings, but that has done little to calm nervous investors. Europe Financials Index has seen 134% more viewers this past week compared to the same period a week ago, as many banks in the region have been pummeled lately. As an example, iShares MSCI Europe Financials (EUFN ) has dropped slightly over the past week, helped by better-than-expected earnings of some banks, including Credit Agricole and Societe Generale. HSBC Holdings (HBCYF), the largest holding in the index, reported a drop in earnings, but the announcement of a buyback plan boosted the stock. Year-to-date, iShares MSCI Europe is down 21.5%.
A stress test conducted by the European Central Bank this week has only exacerbated worries of contagion in the European Union. Shares of many banks have been hit as a result, with Italy’s UniCredit and Germany’s Commerzbank among the worst.
Crude Oil: No Light Yet at the End of the Tunnel
Oil ETFs have attracted 95% more readers this week as crude prices continued their downward slide lately, dragged down by higher inventories in the U.S. Since last Thursday, United States Oil Fund (USO ) has tumbled 2.12%, extending year-to-date losses to 11.91%.
The recovery in oil prices this spring proved short-lived, with the downward trend resuming at the beginning of June on fears of a new supply glut. Confirming the grim picture, crude stockpiles rose 1.4 million barrels in the past week against expectations of a 1.6 million fall. Still, oil rallied Wednesday on reports of a large drop in gasoline stockpiles, 3.3 million barrels last week.
The Bottom Line
The trends this week reveal that investors are worried about the state of the global economy and are in search of opportunities that will shield them from eventual shocks. Silver miners and platinum, which top the weekly list, are certain to provide them that type of safety. Meanwhile, crude oil and Europe Financials have given investors headaches, with the former suffering from a supply glut and the latter enduring pain from low interest rates. The only bright spot in the list is Amazon, which is likely finally turning to consistent profitability.
By analyzing how you, our valued readers, search our property each week, we hope to uncover important trends that will help you understand how the market is behaving so you can fine-tune your investment strategy. At the end of the week, we’ll share these trends, giving you better insight into the relevant market events that will allow you to make more valuable decisions for your portfolio.