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 big news this week has been the deal finally agreed upon by OPEC members to cut the supply of oil. The agreement comes at a time when many started to have doubts about the cartel’s relevance. With the accord in place and oil prices surging, those doubts have been put to rest – at least temporarily. Italians are heading into the vote on constitutional reform this Sunday, in another moment of truth for the European Union. A vote for ditching the bicameral system (unlikely) will quell fears of the country exiting the single bloc, while a vote against the reform will force Prime Minister Matteo Renzi to resign and throw the country into an uncertain future. For more on the referendum’s implications for investors, read Quitaly: Are you Prepared for Italy’s Referendum?. ECB President Mario Draghi sounded out a downbeat tone on the world economy, citing Brexit and increasing geopolitical risks. This means the ECB will likely keep its accommodative monetary policy in place for the coming period, if it doesn’t announce further stimulus plans. U.S. GDP for the third quarter came in at 3.2%, slightly beating expectations of 3.1%. The figure marked an increase from the last quarter when the economy grew by 2.9%. In a further sign the U.S. economy is on strong footing, consumer confidence increased to 107.1 in November from 100.8 in the previous month. ADP said the U.S. economy created 216,000 jobs in November compared to estimates of just 160,000. Chicago PMI stood at 57.6 for November, beating consensus of 52. Crude oil inventories dropped by 0.9 million in the U.S., the second consecutive week of negative figures. Chinese manufacturing PMI rose to 51.7 in November from 51.2 in the previous month. British manufacturing PMI fell to 53.4 in November from 54.2 in October. Unemployment claims in the U.S. came in at 268,000 this week compared to 253,000 last week.
Risk Appetite Review
The broad market (SPY A) was down 0.69% this week, ending a bull market started when Donald Trump won the U.S. presidency. High Beta ETF (SPHB B-) was the single riser from the pack, up 0.97%. Equal Weight (RSP B+) was the worst performer, falling 0.73%.
Major Index Review
Markets posted mixed results for the week. Dow Jones (DIA A-) was the only index that rose last week, advancing 0.42%. For the rolling month, iShares Russell 2000 Index (IWM B+) was up as much as 10.37%, as Trump’s America first policy boosted small-cap firms that primarily conduct business in the U.S. The technology index (QQQ A-) posted the worst performance last week, dropping 2.61% largely on political reasons. Investors fret that many tech companies will suffer under a Trump presidency. Emerging markets (EEM A-), were again the worst performers for the rolling month, tumbling more than 5.90%. Mexico, China and other developing countries could have a hard time with Donald Trump as President of the U.S. He repeatedly signaled he wanted to renegotiate the commercial relationship with these countries, including scrapping a trade deal with Mexico.
Foreign Equity Review
The picture for foreign ETFs is mixed. While other emerging countries have been suffering outflows since Trump was elected president, Russia (RSX B+) has been celebrating. (RSX B+) was again the best performer of the week and rolling month, surging 2.18% and 5.35%, respectively. Trump indicated he wanted to re-establish good relationships with the Russian government, which readily accepted the overtures. Economic sanctions could be lifted as a result. Brazil (EWZ B+), meanwhile, has been the worst performer, tumbling 4.75% this week. For the rolling month, Brazilian equities are down a staggering 16.34%. The political climate in Brazil is again getting tense. A corruption probe could target top politicians in the country, making much-needed economic reforms harder to pass. Meanwhile, a recent attempt to accelerate a vote on anti-corruption measures failed to garner enough support, further spooking investors. 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 were mixed for the week. Natural gas (UNG B-) has been the best performer this week from the commodities bunch, advancing 11.45%, followed by oil (USO A), which rose nearly 8% on the OPEC deal. (UNG B-) staged double-digit advances on falling U.S. stockpiles. For the week ending November 25, natural gas inventories decreased by 52 billion cubic feet. For the rolling month, copper (JJC A) remains the best performer, up more than 20% on the hope that Chinese demand will pick up and Trump will deliver on his promise to spend heavily on infrastructure. The Agriculture ETF (DBA A) was the worst performer this week, down 2.62%. While silver (SLV C+) staged the worst performance for the rolling month, tumbling nearly 10% on the back of a risk-on mood in the market. Use our Head-to-Head Comparison tool to compare two ETFs such as (DBA A) and (UNG B-) on a variety of criteria including performance, AUM, trading volume and expenses.
The British pound (FXB A-) has continued to recover some of its lost ground against other currencies, after lawmakers suggested the government was ready to contribute to the EU budget to keep access to the single market. It is yet unclear whether the EU would agree to such a deal, but investors turned optimistic on the government’s perceived interest in retaining close commercial relationships with its bigger neighbor. The U.S. dollar (UUP A) has posted the best performance for the rolling month, advancing 3.04% on bets the Federal Reserve will increase its benchmark interest rate this month – and many more times next year. The Japanese yen (FXY C+) was again the worst performer for the week and the rolling month, falling 1.06% and 8.09%, respectively. Check out the previous ETF Scorecard: November 25 Edition for comparison purposes of ETFs mentioned on week-over-week basis and for more information about the dollar’s past performance.
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Disclosure: No positions at time of writing.