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 were all considerably up.
- This week, three important central banks provided updates on monetary policy.
- First, Britain elected to hold interest rates unchanged at record lows of 0.25%, and to keep the newly enlarged government bonds purchase program in place at £435 billion. It also increased its forecast for the third quarter growth to 0.3% from 0.1% previously.
- The Bank of Japan followed suit, but fell short of meeting expectations of pushing rates further into negative territory from -0.1%. The BoJ said it will now target long-term interest rates, with a goal of maintaining the ten-year government yield at zero. The move is seen as a lending hand to Japan’s struggling banks.
- The U.S. Federal Reserve was the last to issue an update, and said it will keep interest rates unchanged at 0.50%, but strongly hinted a rate increase was possible by the end of this year.
- Inflation in the U.S. edged up 0.2% in August, beating expectations of 0.1%. Year-to-date, inflation has risen 1.1%.
- Consumer sentiment, meanwhile, was flat at 89.8, against forecasts of 91.
- Housing starts in August decreased in the U.S. from 1.21 million to 1.14 million. Pundits forecasted a reading of 1.19 million.
- Crude oil stockpiles fell by 6.2 billion barrels this week, against forecasts of a 3.2 million rise.
- Jobless claims came in at 252,000 for the week versus consensus of 261,000.
Risk Appetite Review
- The broad market (SPY ) is up 1.73% this week, representing the worst performance of the bunch.
- The Low Volatility ETF (SPLV ) is up 2.78% since last Thursday, posting the best performance for the week, as investors flocked to safer equities.
- The High Beta ETF (SPHB ) jumped 1.85%.
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Major Index Review
- All major indexes have risen this week.
- Emerging Markets (EEM ) posted the best performance for the week and the rolling month, advancing 4.55% and 1.87%, respectively as the equity markets across the globe were in recovery mode.
- The Dow Jones (DIA ) has risen the least this week, by 1.19%. The index remains down 1.10% over the past month, failing to recover all the lost ground in the recent sell-off.
Foreign Equity Review
- Foreign ETFs were all up for the week.
- Japan (EWJ ) has been the best performer over the past five days with a 5.86% advance, helped primarily by a surge in banking stocks. An ETF tracking Japanese banks, (DXJF ), has soared nearly 8% this week, as BoJ’s emphasis on banks’ profitability excited investors.
- The best performer for the rolling month is China (FXI ), up 3.87%, as the country prepares for an extended holiday during which the markets will be closed for one week.
- India (EPI ) has had the worst performance this week, rising only 2.45%. Investors tread cautiously following a renewal of tensions between India and Pakistan. On the bright side, investors expect a rate cut to underpin equities.
- For the rolling month, Britain’s stock markets (EWU ) fared the worst, dropping 0.44%.
- Unexpectedly, commodities were all up this week.
- Silver (SLV ) has had the best performance this week, rising as much as 6.36%, underpinned by dovish stances of the U.S. Federal Reserve and the Bank of Japan.
- Copper (JJC ), meanwhile, has posted the worst performance for the week, advancing just 1.92%.
- For the rolling month, natural gas (UNG ) has risen the most, about 8.83%, helped by easing worries of a supply glut.
- Oil (USO ) has had the worst monthly performance, falling 2.50%.
- Currencies were all up for the week, with two exceptions.
- The Australian dollar (FXA ) has risen 2.18% since last Thursday, trumping the performance of its peers, boosted by the Federal Reserve’s decision to keep interest rates unchanged and by surging commodity prices.
- The U.S. dollar (UUP ) was the worst performer this week, falling 0.44%, as a dovish Federal Reserve proved a headwind to performance. However, the greenback has posted the best performance for the rolling month, rising 1.07%.
- Euro (FXE ) has dropped the most for the rolling month, by 1.14%.
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Disclosure: No positions at time of writing.