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.
- Markets have continued their upward trajectory this week.
- Japan’s GDP stumbled in the second quarter, rising just 0.2% on an annualized basis compared to 1.9% in the previous quarter, raising concerns about the effectiveness of the government’s stimulus measures. More stimulus could follow.
- In the U.K., inflation is continuing to rise on the back of a weaker pound following the Brexit vote: the CPI rose to 0.6% in July from 0.5% in June and 0.4% in May.
- U.K.’s employment data showed positive signs, despite expectations of a deterioration of the jobs market. In July, the number of people claiming unemployment benefits fell by 8,600, against forecasts of a 5,200 rise.
- German ZEW economic sentiment climbed back from negative territory in July, to 0.5, indicating slight optimism in the market, while overall EU sentiment stood at 4.6, up from -14.7 previously.
- In the U.S., consumer inflation remained unchanged in July at 1.6%, despite signs of accelerating economic activity.
- The Federal Reserve’s minutes showed policymakers were divided on when to increase interest rates again, with some favoring an imminent hike, while others suggested more data was needed before making a decision. For now, doves are winning.
- Unemployment claims in the U.S. stood at 262,000 versus expectations of 265,000, further confirming a bright labor market picture.
- Philly Fed manufacturing index was in expansion mode in July, with a reading of 2.0, in line with analysts’ expectations.
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Risk Appetite Review
- The broad market (SPY ) has risen 0.26% this week, as market optimism seems unwavering.
- Low Volatility ETF (SPLV ) is down 0.28% since last Thursday.
- The high beta ETF (SPHB ) has jumped 2.46% in the past week, confirming a risk-on environment, despite weak fundamental data.
Major Index Review
- All major indexes are up this week.
- This week, iShares Russell 2000 Index (IWM ) has posted the best performance, rising 0.91%.
- Emerging markets (EEM ) have fared best for the rolling month, advancing 5.94% on the back of recovering oil prices and expectations the Federal Reserve will not raise interest rates anytime soon.
- Dow Jones (DIA ) is the worst performer for the week and the rolling month, up 0.11% and 0.72%, respectively, as other riskier asset classes were favored by investors. Dow Jones reached new all-time highs this week.
Foreign Equity Review
- Foreign ETFs were mixed for the week.
- The Chinese equities (FXI ) have bested every other asset this week, with a 2.09% rise on market optimism about the approval of a trading connect between mainland China’s Shenzen bourse and Hong Kong’s stock exchange.
- Brazil (EWZ ) is the worst performer this week, with a fall of 0.69%, after weeks of outperformance. This week, the market was in correction mode.
- Germany (EWG ) is the best performer for the rolling month, with a 9.37% gain.
- For the rolling month, Russia’s stock markets (RSX ) have fared worse, rising just 2.67%, as the renewal of tensions in Eastern Ukraine prompted fears the country could face a new round of sanctions from its Western allies.
- Commodities were all up, with two exceptions.
- Oil (USO ) has had a stellar performance this week, soaring as much as 9.71%, which makes it the best performer for the week and the rolling month. U.S. stockpiles unexpectedly dropped by 2.5 million barrels this week, while optimism about a possible deal between Russia and Saudi Arabia on freezing oil output further boosted crude. For the rolling month, oil is up 4.73%.
- Silver (SLV ) has been the worst performer this week, dropping 1.98%, after weeks of recording exceptional gains. The metal started to suffer on the back of a risk-on approach in the market.
- Copper (JJC ) has fallen 4.14% for the rolling month, representing the worst performance of the bunch, as a supply glut is unlikely to abate anytime soon.
- Currencies were mixed for the week.
- The Euro (FXE ) has risen the most this week, by 1.48%.
- The U.S. dollar (UUP ) has posted the worst performance for the week and the rolling month, dropping 1.38% and 2.99%, respectively.
- The Japanese yen (FXY ) is the best performer for the rolling month, up 6.48%, as the latest disappointing GDP data prompted bets authorities will take further steps to stimulate a stagnating economy.
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Disclosure: No positions at time of writing.