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.
Markets are mostly down this week. A string of manufacturing and services indexes in Europe pointed to an unequal performance, with Germany in expansion mode and France’s manufacturing contracting. Overall in the EU, both indexes continue to show growth and stay above the 50.0 limit. New home sales in the U.S. stood at an annualized 654,000 in July versus 582,000 in the previous month. Analysts had expected a reading of 580,000. Germany’s GDP rose 0.4% in the second quarter, beating forecasts of 0.3%. Crude oil inventories rose 2.5 million barrels this week against expectations of a 0.5 million fall. Unemployment claims in the U.S. were at 261,000, beating expectations of 265,000, while durable goods orders increased 4.4% for July, comfortably trouncing consensus of 3.7%. In Britain, GDP increased 0.6% for the second quarter, but that result doesn’t include the aftermath of the Brexit vote. The next report should be more interesting. In the U.S., the GDP for the second quarter came in at 1.1%, down from a previous estimate of 1.2%. The most powerful central bankers of the world have gathered in Wyoming for the annual Jackson Hole Symposium. The Federal Reserve’s Chair will hold a speech on Friday.
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Risk Appetite Review
The broad market (SPY A) has fallen 0.28% this week, retreating slightly from all-time highs. Low Volatility ETF (SPLV A) is down 0.26% since last Thursday. The high beta ETF (SPHB B-) has dropped 0.31% in the past week, posting the worst performance after weeks of beating other indices as investors embraced risk.
Major Index Review
All major indexes are down this week, with two exceptions. IShares Russell 2000 Index (IWM B+) has again posted the best performance, jumping 0.44%. Emerging markets (EEM A-) have fared best for the rolling month advancing 3.55%, as recovering oil prices and low interest rates in the developed world made investors pile into these equities. However, emerging markets fell the most this week, by 0.86%, as traders were more cautious over the past five days. Dow Jones (DIA A-) is the worst performer for the rolling month, down 0.13%. All other indexes are up.
Foreign Equity Review
Foreign ETFs are all down for the week, with the exception of Japan and Britain. Britain’s equities (EWU A-) have risen the most this week, about 0.57%, helped by the Bank of England’s new stimulus measures and dropping bond yields. Brazil (EWZ B+) is the worst performer this week with a fall of 2.20%, continuing the correction started last week. Before last week, Brazil’s stock market had been outperforming other assets. Germany (EWG B+) is the best performer for the rolling month with a 5.32% gain. India (EPI B+), meanwhile, has advanced 1.62% in the past month, representing the worst performance of the bunch.
Commodities were all down, with one exception. Natural gas (UNG B-) has been the only riser from the bunch, up a staggering 9.16% in the past week on the back of a smaller-than-expected rise in storage levels in the U.S. For the week ending August 19, supplies increased by 11 billion cubic feet compared to 18 billion expected by analysts. Copper (JJC A) is this week’s worst performer, down 4.65%, on stagnant demand from China, which has been slowing industrial construction lately. Copper is also the worst performer for the rolling month, tumbling 7.78%. Oil (USO A) has lodged the best performance for the rolling month, rising 8.42%, on optimism about a potential deal between Russia and Saudi Arabia on limiting supply.
Currencies were mixed for the week. The British pound (FXB A-) has finally started to recover, although it is unclear how long it will last. The pound has jumped 1.15% this week, representing the best performance. Emerging currencies (CEW A) were the worst performers this week, slightly falling 0.39%. The Japanese yen (FXY C+) is the best performer for the rolling month, up 3.67%. The U.S. dollar (UUP A) has dropped 2.47% in the past month, as investors pushed further bets of a rate increase by the Federal Reserve.
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Disclosure: No positions at time of writing.