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.
- Important events abound this week, with the inauguration of Donald Trump as president of the U.S. being perhaps the most significant. However, U.K. Prime Minister Theresa May’s speech on her vision of Brexit and the ECB press conference also garnered attention.
- U.S. retail sales increased 0.6% in December, disappointing bullish analysts who expected a rise of 0.7%.
- The U.S. producer price index rose 0.3% last month, in-line with expectations.
- The U.S. consumer sentiment also disappointed analysts, coming in at 98.1 against forecasts of 98.6.
- Consumer prices in the U.K. continued to increase at a faster pace in December, rising to 1.6% from 1.2% previously, chiefly because of a weak pound. Pundits had expected inflation to rise 1.4%.
- Prime Minister May laid out her vision of Brexit, presenting a hardline stance. May said she will fight for control over immigration, lower EU budget contributions and promote free-trade, threatening not to close a deal at all if her demands are not met. The EU has suggested the U.K. cannot have it all, making clear that a potential agreement should leave the U.K. worse off on the outside than as part of the single bloc.
- Industrial production in Japan stood at 1.5%, meeting expectations.
- U.S. CPI increased 0.3% month-over-month in December, in-line with forecasts. Year-over-year, inflation in the U.S. stood at 2.1%, exceeding the Federal Reserve’s target of 2% for the first time since 2011, when CPI was nearly 3%.
- U.S. industrial production rose 0.8% in December compared to the previous month, beating estimates of 0.6%.
- Housing starts in the U.S. came in at 1.22 million for the month of December, beating the consensus of 1.20 million.
- Unemployment claims for the week ended January 14 were at 234,000, below estimates of 255,000.
- U.S. crude oil inventories increased by 2.3 million barrels in the week ended January 13, significantly more than 0.1 million expected.
- The Philadelphia Fed Business Outlook Survey, a leading indicator, surged to 23.6 from 19.7 previously. Analysts had expected the indicator to come in at 16.
- As expected, Mario Draghi struck a dovish tone at the first European Central Bank press conference this year, leaving the monetary policy unchanged. Rates are hovering around zero, while the €80 billion asset-purchase program per month remains in place till March 2017. Starting April 2017, it will buy €60 billion each month to stimulate the Eurozone.
Risk Appetite Review
- The broad market (SPY ) has fallen 0.36% since last Thursday, retracing from record highs.
- Low Volatility ETF (SPLV ) was the best performer this week, rising slightly by 0.17%.
- High Beta ETF (SPHB ) was again the worst performer, dropping 1.15%, after registering a fall of 0.82% in the previous week.
- To see how these indices performed last week, read our ETF Scorecard: January 13 Edition.
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Major Index Review
- Markets were all down for the week, with one exception.
- The technology index (QQQ ) was the single riser from the pack, advancing 0.14%.
- For the rolling month, however, emerging markets (EEM ) posted the best performance, jumping 3.83%, helped by a weaker dollar and stronger commodity prices.
- iShares Russell 2000 Index (IWM ) continued to reverse the gains achieved following the unexpected victory of Donald Trump in the U.S. presidential election. (IWM ) has fallen 1.40%, extending monthly losses to 2.57%. Investor euphoria surrounding the potential boost to smaller U.S. companies from potential Trump fiscal policies and his “America first” mantra has watered down.
- Use our Head-to-Head Comparison tool to compare two ETFs such as (QQQ ) and (IWM ) on a variety of criteria, such as performance, AUM, trading volume and expenses.
Foreign Equity Review
- Foreign equities were all down, with the exception of Brazil.
- Brazil (EWZ ) is the best performer for the third consecutive week, although it has jumped only slightly over the past five days. (EWZ )’s 0.70% advance in the last week helped the ETF post the best gains for the rolling month as well, up an impressive 14.19%. Investors were thrown back by the political turmoil but cheered the central bank’s recent interest rate cut and the potential economic reforms.
- After weeks of gains, Russia (RSX ) has finally retraced, falling 1.69%. Russian equities had rallied on the prospect of improved relations with the U.S. And while Trump still favors a thaw, many of his cabinet picks as well as the Republican party are not promoting the same message.
- Japan (EWJ ) has been the worst performer for the rolling month, erasing 0.73% of its value.
- To find out more about ETFs exposed to particular countries, use ETF Country Exposure tool. Select a particular country from a world map and get a list of all ETFs with exposure to the country of your choice.
- Silver (SLV ) and gold (GLD ) were the best performers for the week, as the precious metals continued to recover from their respective nadirs, with (SLV ) jumping 1.90% and gold 0.99%. The two commodities were the best performers for the rolling month as well, with silver up 8.48% and gold 6.79%.
- Natural gas (UNG ) continued to fall this week, although it started to trim losses by the end of the week on lower storage levels. (UNG ) fell 2.70% over the past five days.
- Oil (USO ) was the worst performer for the trailing month, shedding 4.28% on signs the U.S. shale industry is reviving on the back of higher crude prices.
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- Currencies have posted mixed results this week. For a full list of Currency ETFs, click here.
- The U.S. dollar (UUP ) was the worst performer, as it fell 0.23%. The dollar is also the worst performer for the rolling month, staging a drop of 2.36%. The greenback has weakened lately on Trump’s comments that he believes the currency is too strong, particularly compared to China’s yuan. However, the president may not have many tools to weaken the dollar over the long term without severely impacting his fiscal stimulus program.
- The British pound (FXB ) was the best performer this week, up 1.39%, as investors welcomed Prime Minister Theresa May’s clarifications on Brexit. May has revealed a hardline position, making clear that control of immigration was her main priority.
- For the rolling month, the Australian dollar (FXA ) has advanced 4.66% on rising commodity prices and an improving Chinese economy.
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Disclosure: No positions at time of writing.