News
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 final week of summer was largely uneventful, with the Jackson Hole Symposium taking center stage.
- World central bankers were rather tight-lipped at Jackson Hole, refraining from discussing near-term monetary policies and focusing instead on the long-term effects. Still, it appeared that bankers fear currency appreciation, with the potential for a trade war. Both ECB President Mario Draghi and Fed chair Janet Yellen came out against some of Donald Trump’s policies of stifling global trade and diminishing financial regulations.
- Germany’s business climate could not be more upbeat. An index by the Institute of Economic Research stood at 115.9 in August, hitting a 20-year high. Analysts had expected a reading of 115.5.
- U.S. new orders fell 6.8% in July largely due to a steep decline in aircraft sales. Core orders, which excludes transportation items, was up 0.5% compared to last month and 5.6% compared to last year.
- Baker Hughes rig count for North America decreased from 1160 to 1157 for the week ended August 25. The U.S. was chiefly responsible for the decline, with the rig count standing at 940 compared to 946 in the previous week.
- U.S. consumer confidence was quite solid in August, with the index rising to 122.9 from 120. Pundits had predicted a slight advance to 120.6.
- ADP employment report predicted a strong August for the U.S. job market, with net jobs increasing by 237,000 and beating consensus estimates of 185,000. In the previous month, ADP predicted 178,000 additions.
- U.S. second quarter GDP increased by a solid 3%, compared to 2.6% in the previous quarter and consensus estimates of 2.8%.
- Crude oil inventories continued their downward slide, dropping by 5.4 million barrels for the week ended August 25. This represents the ninth weekly decline in a row.
- European CPI grew to 1.5% in August, beating forecasts of 1.4% and higher by 20 basis points compared to last month.
- Jobless claims of 236,000 were in line with expectations and marked a slight deterioration compared to last week.
Risk Appetite Review
- Markets rallied this week, with the S&P 500 (SPY ) as the best performer with a gain of 1.06%.
- Low volatility (SPLV ) is again the worst performer from the bunch, advancing just 0.44%.
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Major Index Review
- Global equities rallied this week as Fed policymakers sent conflicting signals on the pace of future rate hikes.
- Technology stocks (QQQ ) were the best performers this week with a surge of 2.38%, as investors embraced risk.
- Emerging markets (EEM ) posted the worst performance after an impressive surge last week. (EEM ) declined 0.20%. However, emerging markets are the best performers for the rolling month, soaring 1.89% thanks to a weaker dollar and improving market sentiment.
- iShares Russell 2000 Index (IWM ) is again the poorest performer for the month, with a drop of 1.72%.
- To see how these indices performed last week, check out ETF Scorecard: August 25 Edition.
Sectors Review
- The healthcare sector (XLV ) was the king this week with a return of 2.77%.
- The financial industry (XLF ) suffered the most, falling 0.36%, as Fed chair Yellen underscored the importance of financial regulation. The banking sector rallied this year on prospects of less red tape promised by President Donald Trump.
- The energy sector (XLE ) was the poorest performer for the month, dropping 5.54%.
- After two strong weeks, utilities (XLU ) are the best performers, posting gains of 3.13%.
Foreign Equity Review
- Russia (RSX ) is surprisingly the best performer from foreign equities, as it recovered from a selloff in the second quarter. (RSX ) advanced 3.8% and is also the best monthly performer with a rise of 6.3%.
- After being the best performer last week, Brazil (EWZ ) is now on the bottom of the list, albeit with a small decline of just 0.84%.
- For the rolling month, Britain (EWU ) underperformed the most, falling 1.60%.
- 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 Review
- Commodities were mixed.
- Silver (SLV ) gained the most among commodities, despite the fact that investors apparently embraced riskier assets of late. (SLV ) advanced 2.90%.
- Oil (USO ) is the worst performer with a decline of 0.72%, as a continuing drop in U.S. stockpiles failed to prop up the commodity.
- For the rolling month, copper is the best performer, advancing an impressive 7.25%, while the agriculture fund (DBA ) fell the most – by 6.14%.
- Use our Head-to-Head Comparison tool to compare two ETFs such as (SLV ) and (JJC ) on a variety of criteria such as performance, AUM, trading volume and expenses.
Currency Review
- The European shared currency (FXE ) is again the king this week, although its ascent tailed off. The euro rose 0.78%, slightly beating Britain’s pound (FXB ) of 0.74%. (FXB ), however, remains the poorest performer for the rolling month – down 2.26%.
- The U.S. dollar (UUP ) posted the worst performance, dropping 0.54%, but good economic data of late diminished its downward fall.
- Emerging markets (CEW ) are the best monthly performers with a solid gain of nearly 1%.
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Disclosure: No positions at time of writing.
