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.
- The Bank of England (BoE) decided to keep its monetary policy steady, with the Monetary Policy Committee voting 6 to 2 to keep interest rates unchanged at 0.25%. Governor Mark Carney said the central bank will be forced to raise interest rates sometime over the next three years, adding that two increases over that period may be insufficient. BoE also downgraded its economic growth forecast by 20 basis points to 1.7%.
- The Reserve Bank of India decided to cut interest rates by 0.25% this past week to 6%, as a slump in food prices started to put pressure on inflation, now at a five-year low of 1.5%.
- U.S. second-quarter GDP was healthy, growing at an annualized pace of 2.6%. The figure was roughly in line with expectations of 2.5%.
- U.S. consumer sentiment stood at 93.4 in the last two weeks of July, improving from 93.1 at the beginning of the previous month.
- U.S. oil rigs were up to 958 in the July 28 week compared to 950 previously. The North American rig count is up by 22 to 1,178 during the same period.
- In Europe, German retail sales and the Italian unemployment rate were both upbeat, but inflation is still low at 1.3% in July year-over-year.
- U.S. pending home sales grew 1.5% in June, beating estimates of 0.9%. The increase came after three straight declines.
- U.S. PMI manufacturing index was in expansion mode in July, advancing to 53.3 from 52 in the previous month.
- Britain’s manufacturing PMI also improved to 55.1 from a revised 54.2 previously, largely due to record growth of new export orders. Meanwhile, construction PMI dropped dramatically to 51.9 from 54.8 in the prior month.
- Unemployment claims continue to hover near historic levels, with new claims falling by 5,000 to 240,000 in the week ended July 29.
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Risk Appetite Review
- Risky assets were shunned this week, with High Beta (SPHB ) being the worst performer with a drop of 0.89%.
- Low Volatility (SPLV ) was again the strongest performer, jumping 0.71%.
- The broad market (SPY ) posted small gains this week of 0.13%.
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Major Index Review
- Global equities have all rallied with one glaring exception.
- iShares MSCI EAFE Index Fund (EFA ), an ETF containing stocks from Australasia and Europe, was the best performer this week with a rise of 1.23%. A cut in Indian interest rates and strengthening European and Chinese economies boosted global optimism, leading to higher stock prices.
- iShares Russell 2000 Index (IWM ) again disappointed this week, being the only faller with a significant drop of 1.75%. The index is chiefly composed of firms with business operations in the U.S. and the U.S. economy has been in a rough patch lately. A weak U.S. dollar is also a sign of internal economic weakness. iShares Russell 2000 is also the worst performer for the rolling month, down 1.53%.
- Emerging markets (EEM ) surged the most over the rolling month, up 5.80%.
- To see how these indices performed last week, check out ETF Scorecard: July 28 Edition.
- Utilities (XLU ) were the strongest of the bunch this week, advancing 1.85%. The sector was attractive to investors as the imminent fear of surging bond yields didn’t materialize. The Federal Reserve kept its monetary policy unchanged and hinted it may slow down the pace of rate hikes.
- The materials sector (XLB ) was the worst performer this week with a fall of 1.79%.
- For the rolling month, the tech sector (XLK ) was the clear outperformer with an impressive advance of 5.39%, helped by strong earnings from many tech heavyweights, including Apple (AAPL).
- The energy sector (XLE ) was the worst performer for the rolling month, down 0.62%.
Foreign Equity Review
- Brazil (FXI ) surged 3.58% since last Thursday, representing the best performance from the pack. The country’s equities have been boosted by optimism that President Michel Temer will be allowed to implement his market-friendly reforms. Just recently, the lower House of Congress voted to reject a corruption charge against Temer, who will now avoid a Supreme Court trial that had the potential to eject him from office. Brazil is also the best performer for the rolling month, up more than 12%.
- Although it rose 0.8% in the past week, Russia (RSX ) is the worst performer this week, dragged down by a pack of fresh sanctions from the U.S.
- Surprisingly, Germany (EWG ) is the worst monthly performer with an advance of only 2.52%.
- To find out more about ETFs exposed to particular countries, use our ETF Country Exposure tool. Select a particular country from a world map and get a list of all ETFs tracking your pick.
- Commodities were mixed.
- Gold (GLD ) was the best performer for the week with a tepid advance of 0.37%.
- For the rolling month, copper (JJC ) was the king, surging 9.36% on supply disruptions and increasing demand from China, the main consumer on the global arena.
- Natural gas (UNG ) fell nearly 6% since last Thursday due to increasing stockpiles. The bad performance pushed the commodity to become the worst-performing asset for the rolling month as well, down 3.38%.
- Use our Head-to-Head Comparison tool to compare two ETFs such as (GLD ) and (JJC ) on a variety of criteria such as performance, AUM, trading volume and expenses.
- The U.S. dollar (UUP ) was beaten up again, dropping 0.91% since last Thursday. The greenback is the worst monthly performer and the only faller, with a drop of 3.77%.
- The European shared currency (FXE ) was the best performer this week, advancing 1.26%.
- For the rolling month, however, the Australian dollar (FXA ) advanced 4.84%, slightly beating the 4.82% performance of the euro.
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Disclosure: No positions at time of writing.