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 down this week, after posting mixed performances last week. Check out the previous ETF Scorecard: October 21 Edition for comparison purposes of ETFs mentioned on a week-over-week basis.
- The U.S. GDP rose 2.9% in the third quarter, trumping estimates of 2.5%. In the previous quarter, the U.S. economy grew by 1.4%. The upbeat data bolstered bets that the Federal Reserve will raise rates this year.
- In Europe, inflation rose 0.5% year-over-year in October, which was significantly below the central bank’s target of close to but below 2%.
- China’s manufacturing sector is becoming more optimistic with the Purchasing Managers’ Index rising to 51.2 from 50.4 previously.
- The Bank of Japan left its monetary policy unchanged at a meeting on Monday. However, it changed its forecasts for reaching its inflation target of 2% to March 2019. It also reaffirmed its commitment to target a zero yield on ten-year government bonds.
- Britain’s manufacturing PMI fell to 54.3 in October, from a revised 55.5 in the previous month.
- The Bank of England signaled that it does not expect to decrease rates this year, underpinning the pound.
- The U.S. economy added 147,000 private payroll jobs in October, according to an ADP report, which is below consensus estimates of 170,000 and down from a revised 202,000 last month.
- U.S. crude oil inventories increased by 14.4 million barrels compared to the previous week, representing the upper limit of the average range for this period of the year.
- U.S. unemployment claims in the U.S. rose by 7,000 to 265,000 this week.
- The ISM Non-Manufacturing Index for the U.S. fell to 54.8 in October, from 57.1 in the previous period.
- As expected, the Federal Reserve kept rates on hold days before the presidential election reaches its climax. The Fed strongly hinted, however, that a rate increase could follow next month.
Risk Appetite Review
- The broad market (SPY ) was down 2.05% this week, as the reopening of the investigation into Hillary Clinton’s email spooked investors, who seemingly fear a Donald Trump presidency.
- The High Beta ETF (SPHB ) was the worst performer with a 3.05% drop, as investors shunned riskier assets in favor of perceived safety.
- Indeed, Low Volatility (SPLV ) was the best performer and the single riser of the bunch with a 0.95% gain.
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Major Index Review
- Major indexes were all down this week, as Trump started to gain momentum days ahead of the presidential election.
- Unsurprisingly, technology stocks (QQQ ) fell 2.91% since last Thursday, representing the worst performance. Tech stocks are among the worst hit in times of uncertainty.
- The best performer this week is iShares MSCI EAFE Index Fund (EFA ), an index with exposure to Europe, Australasia and the Middle East. These assets are perceived safer than their U.S. counterparts because they are less prone to suffer from a Trump presidency. For a deeper analysis on individual ETF investments such as EFA or DIA, use our ETF Analyzer Tool. You can select ETFs by Category or Type as well as add individual ticker symbols to compare performance, expenses and dividend yield among other metrics.
- The Dow Jones (DIA ) posted the best performance for the rolling month, down 1.92%.
- The worst performer for the rolling month was iShares Russell 2000 Index IWM (IWM ), which dropped a whopping 7.27%. Last week, IWM was the worst performer both for the week and the rolling month.
Foreign Equity Review
- Foreign ETFs were mixed.
- Brazil (EWZ ) has dropped like a stone this week – down 5.61%, after weeks of outperforming most of its foreign peers – as fear engulfed global markets. However, EWZ outperformed all other assets for the rolling month, thanks to impressive gains logged in previous weeks.
- The best performer for the week was Japan (EWJ ), which fell just 0.32%, as the asset is viewed as a safe haven in times of uncertainty.
- For the rolling month, Britain (EWU ) was the worst performer with a 7.23% decline on the back of uncertainty created by the Brexit. The United Kingdom is on track to trigger Article 50 in March 2017, if Prime Minister’s Theresa May’s plan is not impeded by the court and parliament. While Britain is debating internally how best to exit the trading bloc, other countries could choose the same path. Read why Italy Might Be Next to Leave The EU.
- Commodities were mixed for the week.
- Typical in times of uncertainty, silver (SLV ) and gold (GLD ) logged the best performance for the week, after months of suffering. Silver was up 3.57%, while gold advanced 2.56%.
- Natural gas (UNG ) has again been the worst performer for the week, down 10.07%, closely followed by oil (USO ), which tumbled 9.19% on increasing inventories and fears of a global slowdown. UNG dropped 10.72% over the past thirty days, underperforming all of its peers.
- For the rolling month, copper (JJC ) was the best performer with a 2.77% advance, helped by gains in the previous weeks on signs of improving demand from the world’s largest consumer, China.
- All currencies gained this week, with the exception of the U.S. dollar.
- The British pound (FXB ) finally received some positive news and logged the best performance this week with a 2.48% rise. A court decided that Theresa May’s government should consult with parliament before triggering the Brexit process, while the Bank of England made sure it would not decrease interest rates this year. And yet these gains have failed to help the pound erase monthly losses. The currency is down 2.40%; its worst performance.
- The U.S. dollar (UUP ) has been the only loser this week with a 1.61% drop. Clearly, Clinton’s email debacle weighed on the currency, despite positive economic news. The dollar remains, however, the best performer this month with a 1.05% increase.
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Disclosure: No positions at time of writing.