ETF Scorecard: October 6 Edition

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 biggest event this week was the Catalonian illegal referendum for independence, which sent Spanish stocks into a tailspin. Catalonia is delaying declaring independence in the fear businesses will leave the region and due to threats from the European Union that an independent Catalonia will not be part of the trading bloc. A host of businesses have already changed their headquarters, including Banco Sabadell and telecommunications firm Eurona. CaxiaBank, meanwhile, is currently weighing options, as the government in Madrid mulls passing a law that would make it easier for businesses to relocate.

The British pound has suffered as Prime Minister Theresa May is struggling to keep unity in her party over Brexit. Opposition voices led by Foreign Secretary Boris Johnson have weakened her power, both at home and abroad, and now her departure seems more likely than ever. With just 18 months before the scheduled exit, the U.K. could not face more uncertainty over its future with the EU, with many hard-landing scenarios again on the table.

European inflation dropped slightly in September, from 1.6% to 1.5%, on an annual basis, below the central bank’s target of 2%. Core inflation edged even lower, to 1.1% from 1.2%, in August.

U.S. manufacturing PMI advanced to 53.1 in September compared to 52.8 in August, while the ISM manufacturing index surged to 60.8 from 58.8 in the previous month.

The U.S. business sentiment is surging, with the non-manufacturing PMI advancing more than four points in September, to 59.8. Analysts had expected a lower figure of just 55.5.

ADP’s nonfarm employment payroll was not that impacted by the hurricane regions, with the private report suggesting 135,000 jobs were added in September compared to the 140,000 predicted. In the previous month, ADP said 228,000 jobs were added.

U.S. crude oil inventories dropped by more than 6 million barrels for the week ended September 29, around 15% below last year’s levels. The fall was largely expected because hurricane-hit refineries in Texas have resumed operations and are depleting current reserves.

Unemployment claims declined 12,000 to 260,000 for the September 30 week, as the negative effects of the hurricanes have started to wear off.

Risk Appetite Review

Risky assets (SPHB B-) have again rallied this week, despite increasing tension in Europe stemming from Catalonia’s independence push and Brexit. (SPHB B-) advanced more than 2% in the past week.

Low volatility (SPLV A) performed the worst this week, rising only 1.20%, although the performance gap between (SPLV A) and risky assets narrowed.

The broad market (SPY A) rose 1.73% this week, in a renewed bout of optimism about the U.S. economy.

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Major Index Review

All equities were up this week.

Emerging markets (EEM A-) was the best performer for the week, despite a stronger dollar and hints from the Federal Reserve that it would raise interest rates. Worth noting, last week the asset class was at the bottom of the list in terms of performance. (EEM A-) rose 2.73% this week after posting a similar drop in the previous five-day period.

For the rolling month, the small-cap index Russell 2000 (IWM B+), is the best performer with an advance of 6.85%, mainly thanks to Republicans’ push to overhaul the tax code by cutting the corporate tax to 20% from 35%.

Unsurprisingly, the worst ETF performer this week was iShares MSCI EAFE Index Fund (EFA A), which contains European stocks. (EFA A) declined 0.40% this week.

The technology index (QQQ A-) is the worst monthly performer with a rise of just 1.31%.

To see how these indices performed last week, check out ETF Scorecard: September 29 Edition.

Sectors Review

The financial sector is the best performer this week, with (XLF A) soaring 2.25% on rising optimism about Trump’s plan to cut red tape for banks. A recovery in insurance stocks that had been hit by Hurricanes Irma and Harvey also contributed to the positive performance.

The energy sector (XLE A) remains the best monthly performer with an advance of 7.53%

Utilities (XLU A) were shunned by investors, as the markets embraced risk and dumped boring assets. (XLU A) is the worst monthly performer, falling 2.60%.

Foreign Equity Review

Foreign stocks were rather mixed this week.

China’s stock market (FXI A-) is approaching the bubble territory, surging 6.13% in the past week alone without a noteworthy boost. Investor sentiment improved in the region as the nation’s economy seems stable. The impressive rise over the past five days made (FXI A-) the best-performing index for the rolling month, up 5.87%.

Britain’s ETF (EWU A-) is the only faller this week, down 0.14%, as Prime Minister Theresa May is losing her authority over Brexit negotiations and faces stiff opposition from her own party.

India (EPI B+) is the worst performer for the rolling month, registering a drop of 3.18%.

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 Review

Commodities were almost all down.

Copper (JJC A) posted the highest gains for the week, creeping up 2.64%.

Natural gas (UNG B-) was the worst performer of the week, registering a loss of 3.36% due to excess supply.

For the rolling month, oil (USO A) is by far the best performer with a gain of 3.43%.

Silver (SLV C+) lost its shine, tumbling 7.38% for the rolling month as investors flocked to riskier assets.

Use our Head-to-Head Comparison tool to compare two ETFs such as (USO A) and (SLV C+) on a variety of criteria such as performance, AUM, trading volume and expenses.

Currency Review

The U.S. dollar was king for the second consecutive week.

The U.S. dollar (UUP A) has surged nearly 1% this week, as the U.S. economy looked stronger than its counterparts in Europe. The dollar’s strength happened against a backdrop of an improving economy at home and renewed fears about a breakup of the European Union, with Spain’s breakaway region Catalonia pushing for independence. The U.S. dollar is also the strongest currency for the rolling month, with a gain of 1.67%.

The British pound (FXB A-) is unsurprisingly the worst performer for the week, down 2%. Prime Minister Theresa May’s future is hanging in the balance, projecting further uncertainty over Brexit plans.