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ETF Scorecard: December 8 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.

This week, the U.S. Senate passed a bill to cut the corporate tax from 35% to 20%; although, it may undergo further changes after it is reconciled with the House of Representatives’ plan. President Donald Trump suggested that the final tax rate may end up at 22%. Across the Atlantic, U.K. Prime Minister Theresa May has finally reached an agreement on the Irish border with Northern Ireland’s Party, allowing her to start Brexit negotiations with the European Union. U.S. ISM manufacturing index fell to 58.2 in November from 58.7 in the previous month, although the drop is misleading. Delivery times, which are subtracted from the index, improved. ISM non-manufacturing index also dropped in November, although from very high levels. The index posted growth of 57.4, down from 60.1 in the previous month. Analysts had expected a reading of 59. Britain’s construction PMI surged to 53.1 from 50.8 in the previous month, signaling a strong recovery in the sector. This is a welcome advance, considering that the index was in contraction mode in October. U.K. Services PMI, meanwhile, dropped to 53.8 in November from 55.6 in October, but stood in the expansion territory. Last time the index pointed to an industry contraction was in June/July 2016, at the height of the Brexit debacle. ADP reported that the U.S. economy added 190,000 jobs in November, largely in line with forecasts. In the prior month, 235,000 jobs were created, thanks to the positive effects of the twin hurricanes. Crude oil inventories dropped by 5.6 million barrels for the week ended December 1. However, oil producers’ joy was curtailed by a large buildup in gasoline stockpiles, up 6.8 million barrels. U.S. unemployment claims fell by 2,000 to 236,000 for the December 2 week, despite a modest rise for Puerto Rico. Analysts had expected a rise of 2,000.

Risk Appetite Review

The markets mostly dropped this week. High Beta (SPHB B-) is the only gainer for the week, up 0.51%, as investors flocked to riskier assets. Low Volatility (SPLV A) is the worst performer, with a surprising decline of 0.83%. The broad market (SPY A) has moved sideways, but ended the week down 0.26%. Sign up for ETFdb.com Pro and get access to real-time ratings on over 1,900 U.S.-listed ETFs.  

Major Index Review

Global markets were all down. Technology stocks (QQQ A-) posted the smallest drop this week – just 0.11%. Emerging markets (EEM A-) were the worst performers for the second consecutive week, dropping 1.24%, as the Chinese stock market continued its downward slide. The poor performance over the past two weeks made (EEM A-) the worst monthly performer with a fall of nearly 3%. Dow Jones (DIA A-) has kept its hat as the best monthly performer, advancing 2.83%. To see how these indices performed last week, check out ETF Scorecard: December 1 Edition.  

Sectors Review

The financial sector (XLF A) is again the best weekly performer with a rise of more than 1%. The climb came amid broad losses in other industries led by the telecom sector. Financials were boosted by the potential windfall from the expected cut in tax rates from 35% to 20-22%, as suggested by President Donald Trump. The telecom sector (XTL A) dropped like a stone this week, posting losses of 3.50%. The energy industry (XLE A) was beaten up the most for the rolling month, suffering largely because of a steep drop in natural gas prices. Consumer staples (XLP A) continued its upward advance this week, rising nearly 1%. For the rolling month, (XLP A) is the best performer, helped by strong sales during the holiday shopping season.  

Foreign Equity Review

Foreign equities were almost all down. India (EPI B+) has risen 0.57% since last Thursday, a small gain representing the best performance from the pack. China (FXI A-) continued to head down, dropping a staggering 2.5% as investors expect the nation’s central bank will tighten liquidity. As a result of this week’s fall, China has become the worst monthly performer with a drop of nearly 4.5%. All indexes were down for the rolling month, but Britain (EWU A-) has fallen the least, by 0.32%. 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

All commodities have dropped significantly. Natural gas (UNG B-) has tumbled an astounding 10.4% since last Thursday, erasing some of the gains lodged in previous weeks. (UNG B-) is also the worst performer for the rolling month, down 14.2%. Gold (GLD A-) was relatively the best performer; although, with a 2% drop, its returns are not stellar. Propped by a deal to rein in supply between OPEC and Russia, Oil (USO A) remains the best performer for the rolling month with a small contraction of 1.2%. Use our Head-to-Head Comparison tool to compare two ETFs such as (USO A) and (UNG B-) on a variety of criteria such as performance, AUM, trading volume and expenses.  

Currency Review

The U.S. dollar (UUP A) recouped some of the losses against its main peers this week, advancing 0.66%. The Australian dollar (FXA A-) was the worst weekly performer with a decline of 0.87%. (FXA A-) has also dropped nearly 1.9% for the rolling month, representing the poorest performance. The British pound (FXB A-) received some support from progress in Brexit negotiations, surging 2.6% for the rolling month.  

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