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 U.S. Federal Reserve increased interest rates to 0.75%, from 0.50% previously, in a widely anticipated move. The markets were taken by surprise by the Fed’s revision to its forecast for the pace of rate hikes next year – three times versus two suggested previously. For more on the interest rate hike, read Optimistic Federal Reserve Hikes Rates. In the U.S., consumer sentiment continued to improve, rising to 98.0 from 93.8 previously. Analysts had forecasted a figure of 94.1. For the week ending December 9, as many as 27 oil rigs opened in the U.S., 30 in Canada and five worldwide, in a sign that drilling activity is rebounding following the OPEC deal to cut supply. Chinese industrial production increased about 6.2% in November, slightly beating forecasts of 6.1%. Import prices in the U.S. dropped 0.3% in November month-over-month on the back of a stronger dollar. Consumer prices in Britain edged up 1.2% in November from 0.9% in the previous month, as the effects of a weaker pound slowly crept in. In the U.S., retail sales went up just 0.1% in November, below the consensus of 0.4%. Figures for October were revised down to 0.6% from 0.8% previously. Boosting oil prices, U.S. crude inventories dropped for the fourth consecutive week – this time by 2.6 million barrels. U.S. industrial production shrank by 0.4% in November against expectations of a 0.2% drop, while business inventories also fell by 0.2% in October. U.S. CPI increased 1.7% in November year-over-year, up from 1.6% in the previous month. Unemployment claims came in at 254,000 for the past week, broadly in-line with expectations.
Risk Appetite Review
The S&P 500 (SPY A) continued its march forward this week, advancing 0.62% and reaching new highs. High Beta (SPHB B-) was the worst performer, dropping 2.14%. Low Volatility (SPLV A) rose 0.78%, the best performance of the bunch.
Major Index Review
After weeks of advances, markets were mixed the past five days. The technology index (QQQ A-), which seemed to have largely missed the bull run induced by Donald Trump, lodged the highest gain for the week, up 1.15%. President-elect Trump recently met with the executives of the largest Silicon Valley companies, reassuring investors the government will continue to provide support. iShares Russell 2000 Index (IWM B+) remains the best performer for the rolling month with an advance of 5.67%, boosted by Trump’s promised ‘America First’ policies. Emerging markets (EEM A-) suffered the worst decline, falling 2.30% since last Thursday, hurt by the Federal Reserve’s interest rate hike. (EEM A-) is the worst performer for the rolling month as well, staging an advance of just 2.14%. Use our Head-to-Head Comparison tool to compare two ETFs such as (EEM A-) and (QQQ A-) on a variety of criteria, such as performance, AUM, trading volume and expenses.
Foreign Equity Review
Foreign markets were all down for the week, with two exceptions. Russia (RSX B+) was, again, the best performing country with a gain of 2.35%. (RSX B+) is up as much as 16.19% for the rolling month – by far the best performance. Russia has been bolstered by surging oil prices and further signs that its relations with the U.S. will improve considerably after Trump chose Rex Tillerson as his Secretary of State. Tillerson, the CEO of Exxon Mobil, is on very good terms with Russia’s President Vladimir Putin. China (FXI A-) was, again, the worst performer this week, falling as much as 4.01%, as tensions in the region escalated. U.S. President-elect Trump continued to criticize the country and suggested the possibility of dumping the U.S.’s ‘One China’ policy. For the rolling month, Brazil (EWZ B+) lost 2.98%, representing the worst performance. To find out more about ETFs exposed to particular countries, use our ETF Country Exposure Tool. Select a particular country from the world map and get a list of all ETFs with exposure to that country.
Commodities were all down for the week, with one small exception. The Agriculture Fund (DBA A) – an ETF containing live cattle, soybeans and corn futures – was the single riser of the pack, advancing 0.76%. Natural gas (UNG B-) managed to pull the special feature of being the worst performer for the week and the best for the rolling month. Over the past five days, (UNG B-) dropped 9.05% on fears of warmer weather and in spite of a drop in inventories. For the rolling month, (UNG B-) is still up 15.51%. Gold (GLD A-) remains the worst performer for the rolling month, down 7.83%, on fears the Federal Reserve will raise rates at a faster pace than previously anticipated.
The only riser this week was the U.S. dollar, as the Fed raised rates and signaled a faster pace of hikes over the next two years. The dollar (UUP A) was up 1.64% since last Thursday, extending monthly gains to as much as 3.01%. The Japanese yen (FXY C+) has again disappointed, falling 2.67% this week and 7.83% for the rolling month.
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Disclosure: No positions at time of writing.