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.
- As widely expected, France beat out a populist wave this week, with liberal Emmanuel Macron winning in a landslide the presidential election against far-right candidate Marine Le Pen. Macron took 66% of the votes, far more than polls suggested.
- Bank of England left interest rates unchanged at 0.25%, but warned that the economy is deteriorating on the back of Brexit. The central bank reduced its growth forecasts for 2017 to 1.9% from 2%, as the first-quarter GDP growth came in lower than expected – 0.3% against 0.5%. Furthermore, BoE revised up inflation expectations to 2.8% from 2.5% previously. Governor Mark Carney said inflation will stabilize in the upcoming years, subject to a smooth exit from the European Union.
- In South Korea, liberal Moon Jae-in won the presidential election. Moon, who won with 41% of the votes, favors a more open policy towards North Korea at a time when the belligerent nation is posing a rising threat to the U.S. and is becoming a burden to its allies, such as China.
- UK manufacturing production has fallen for the third straight month. In April, manufacturing production fell 0.6%, disappointing analysts, who had expected a 0.2% decline.
- In the U.S., the employment picture continues to be strong. In April, the U.S. economy added 211,000 jobs, considerably higher than expectations of just 185,000. The upbeat figure could be an initial sign that late weakness in the U.S. economy is temporary.
- The U.S. unemployment rate fell to 4.4% from 4.5% previously. The participation level, however, also dropped to 62.9% from 63% in the previous month. Average hourly earnings’ growth of 0.3% was in line with estimates.
- Chinese trade surplus widened significantly in April to 262 billion yuan against forecasts of just short of 200 billion yuan. Exports were up 14% year-on-year, while imports rose 18.6%.
- U.S. crude oil inventories registered the biggest weekly decline this year, dropping 5.2 million barrels for the week ended May 5.
- U.S. unemployment claims came in at 236,000 for the week ended May 6, beating forecasts of 245,000.
- U.S. Producers Price Index surprised to the upside, advancing 0.5% month-over-month in April and 2.5% year-over-year. Expectations were for a 0.2% increase.
Risk Appetite Review
- The broad market (SPY ) was slightly up this week, by 0.08%, after moving sideways on improving economic data.
- High Beta (SPHB ) was the best performer this week, staging gains of 0.49%.
- Low Volatility (SPLV ), meanwhile, was the single faller, posting a loss of 0.39%.
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Major Index Review
- Global equities were mixed on low volatility.
- Emerging markets (EEM ) was the best performer of the week with an advance of 3.14%, partly thanks to a recovery in oil prices and the weaker dollar. For the rolling month, emerging markets was only bested by the technology index.
- Technology stocks (QQQ ) have advanced 4.88% this month on gains posted by giants such as Apple Inc. (AAPL), Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOGL).
- iShares Russell 2000 Index (IWM ) was the worst weekly performer for the second consecutive week, dropping 0.32%.
- Dow Jones (DIA ) was the worst performer for the rolling month, creeping up just 1.48%.
- To see how these indices performed last week, check out ETF Scorecard: May 5 Edition.
- The energy sector (XLE ) has the unique feature of being the best weekly performer and the worst performer for the rolling month. Over the past five days, (XLE ) has risen 2.5%, although for the rolling month it remains down 4.25%. Gains this week were driven partly by oil prices, which recovered somewhat on good demand data from the U.S. Before this week, crude had been pummeled due to renewed fears of a supply glut, with the U.S. accelerating the pace of production and Saudi Arabia signaling an unwillingness to commit to more supply cuts.
- The financial sector (XLF ) was among the few fallers this week, dropping 1.21%. The House Panel recently advanced a bill to ease financial regulations by dismantling the Dodd-Frank Act, although it may not pass both Congress and the Senate. Still, the bill has huge potential to change the regulatory landscape under Donald Trump by cutting red tape.
- The technology index (XLK ) staged the highest gains for the rolling month, advancing 4.82%.
Foreign Equity Review
- Foreign equities were mixed this week.
- Brazil (EWZ ), which has been among the most volatile countries, has staged the best gains, rising 4.82% this week, largely due to higher oil prices.
- Japan (EWJ ), meanwhile, has fallen the most this week, by 0.57%, as its safe-haven appeal dwindled following the election of Macron as president in France.
- Germany (EWG ), which posted impressive gains over the past week, remains the best monthly performer, with an advance of 6.59%. The country’s equities rallied along with other European countries on good economic data across the board and optimism about France’s prospects under new President Macron.
- Chinese stocks (FXI ) have crept up just 0.83% over the past 30 days, representing the worst performance.
- To find out more about ETFs exposed to particular countries, check our ETF Country Exposure tool. Select a particular country from a world map and get a list of all ETFs tracking your pick.
- Commodities posted mixed results.
- After a thoroughly bad last week, Oil (USO ) recovered to become the best performer in the past five days on improving demand in the U.S. (USO ) has increased 4.96% in the past week. However, the impressive gains were not enough to trim monthly losses, which now stand at 10.69%.
- PowerShares DB Agriculture Fund (DBA ) pared some of last week’s gains, registering a fall of 0.50% this week.
- For the rolling month, natural gas (UNG ) was the best performer, edging up 2.78%.
- Currencies posted mixed results.
- Unsurprisingly, the Japanese yen (FXY ) was the worst performer both for the week and the rolling month, as investors flocked to riskier assets in the aftermath of Macron’s victory in the French presidential election. (FXY ) is down 1.11% this week and 3.06% over the past 30 days.
- After a string of bad weeks, the U.S. dollar (UUP ) rose 0.90% during the last five-day period on improving economic data. The greenback’s performance was the best among its peers.
- The British pound (FXB ) posted the best performance this month, advancing 3.69%.
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Disclosure: No positions at time of writing.