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.
- All eyes were on Brazil this week, as the nation’s equities tumbled following a fresh political scandal involving recently installed President Michel Temer, who may be impeached. Temer is accused of bribing an imprisoned former speaker of the lower house of Congress in order to keep his lips sealed. The defiant President is facing calls to step down, just 12 months after assuming office.
- In the U.S., President Donald Trump has run into his first political scandal after firing FBI Director James Comey, who was leading an investigation into whether the president has ties to Russia.
- The U.S. consumer price index rose less than expected in April compared to March, 0.2% against 0.3%. Year-over-year, inflation is still above the Federal Reserve’s target, at 2.2%. CPI less-volatile items such as food and energy increased 1.9% in April compared to the same month last year.
- Retail sales resumed their upward trajectory in April, jumping 0.4%. However, analysts had expected growth of 0.6%.
- Chinese industrial production disappointed in April, advancing just 6.5%. Pundits had forecasted a rise of 7%.
- The UK consumer price index continues its steady advance. In April, the CPI rose 2.7% year-over-year compared to just 2.3% in the previous month. Although the CPI is well above the Bank of England’s forecasts, an interest hike is not expected. The rising inflation could be temporary due to a considerably weaker pound following the Brexit vote.
- In the U.S., housing starts fell 2.6% in April to 1.17 million.
- Crude oil inventories have continued to fall for their sixth consecutive week. Crude stockpiles in the U.S. dropped by 1.8 million for the week ended May 12, marking an improvement from last week’s fall of 5.2 million.
- U.S. jobless claims are steadily heading down, in a sign of economic strength. For the week ended May 13, unemployment claims stood at 232,000, the third consecutive weekly decrease.
Risk Appetite Review
- The broad market (SPY ) was down nearly 1% this week, with most of the fall occurring on Wednesday on growing concerns U.S. President Trump will fail to deliver on his promises of sweeping reforms.
- High Beta (SPHB ) was the worst performer of the week, losing as much as 2.16% of its value.
- Low Volatility (SPLV ) benefited from its safe-haven status, sliding just 0.30%.
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Major Index Review
- Global equities were hit this week.
- iShares MSCI EAFE Index Fund (EFA ), an index containing European equities, among others, was the single riser with a gain of 0.63%. European equities have been on a tear lately, as the Old Continent has beaten populist waves in France and the Netherlands, and the overall economy has been improving. (EFA ) is also the best performer for the rolling month, up an impressive 6.17%.
- Emerging markets (EEM ) is the worst performer this week, falling nearly 2%, as a new political crisis engulfed Brazil – an important component of the index.
- The worst performer from the pack on a rolling month basis, iShares Russell 2000 Index (IWM ) has jumped just 0.49%, as investors are growing frustrated with Trump’s lack of action.
- To see how these indices performed last week, check out ETF Scorecard: May 12 Edition.
- Except for real estate and utilities, all sectors were down for the week.
- Utilities (XLU ) have posted the best gains for the week, advancing 0.54%. Unsurprisingly, the sector benefited from its safe-haven nature and low volatility, as the global markets were in sell-off mood on Wednesday.
- The industrial sector (XLI ) was the worst performer for the week, sliding 1.80%.
- For the rolling month, the technology sector (XLK ) was the clear winner with an increase of 4.19%.
- The energy sector (XLE ) staged the worst losses over the rolling month, down 2.75%, partly due to a rout in the natural gas markets.
Foreign Equity Review
- Foreign equities were mixed this week, with emerging markets, in particular, suffering a heavy blow.
- UK equities (EWU ) have advanced 1.65% for the week and were among the best performers for the rolling month.
- Germany (EWG ) is again the best monthly performer with a gain of 8.73% for the past 30 days.
- There is a little confusion about which country was the worst performer. Brazil (EWZ ) has dropped a stunning 17% in the past five days as a new scandal involving President Michel Temer risks throwing the country into a protracted period of political instability. Temer faces the prospect of being impeached, just one year after Dilma Rousseff was ousted from the post due to similar allegations of bribery. Brazil is also the worst performer for the rolling month, down 12.3%.
- 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.
- Oil (USO ) has continued its recovery this week on improving demand data in the U.S. The commodity staged the best gains this week, rising 2.91%.
- Natural gas (UNG ) was the worst performer for the week with a loss of 5.36%, as the U.S. Energy Information Administration (EIA) reported an increase in storage levels for the May 12 week.
- PowerShares DB Agriculture Fund (DBA ) is the single riser for the rolling month, advancing 1.68%.
- Although it was among the best gainers this week, silver (SLV ) was the worst loser for the past 30 days, down a staggering 9.82%.
- Use our Head-to-Head Comparison tool to compare two ETFs such as (USO ) and (DBA ) on a variety of criteria such as performance, AUM, trading volume and expenses.
- Currencies posted mixed results as well.
- The euro (FXE ) has been on a tear lately as the economy of the European Union continues to improve. The euro is the second-best performer for the week with a gain of 1.76% and the clear winner for the rolling month, up 3.82%.
- The Japanese yen (FXY ) has benefited from its safe haven status as a global selloff on Wednesday boosted demand for safety. The yen is up 1.84% this week. The gains have not helped the yen to ditch its status as the worst-performing currency for the rolling month, down 2.45%
- The U.S. dollar (UUP ) has weakened the most this week, falling 1.48%, as a string of bad economic data combined with the debacle surrounding Trump’s firing of FBI Director Comey has sparked investor worries about his promised reforms.
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Disclosure: No positions at time of writing.