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ETF Scorecard: February 3 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.

U.S. new durable goods orders disappointed analysts, falling 0.4% for the month of December. The consensus estimate was for a rise of 2.6%. Excluding volatile auto sales, new orders rose 0.5%, in line with estimates. U.S. GDP rose 1.9% in the fourth quarter, below consensus of 2.2%. U.S. consumer sentiment rose to 98.5 in January from 98.1 in the previous month. The upbeat figure beat analysts’ expectations, which predicted a reading of 98.2. U.S. Chicago PMI came in well below estimates of 55.3, showing a figure slightly above expansion mode at 50.3, while consumer confidence of 111.8 was also below consensus of 112.2. The Bank of Japan (BoJ) kept its monetary policy stance unchanged at its meeting on January 31, and raised its GDP forecast for 2017 to 1.4% from 1.0% previously. Although the BoJ said the domestic economy continued to improve, it noted the risks stemming from Donald Trump’s protectionist policies. The U.S. is one of Japan’s key trading partners. ADP jobs report crushed estimates of 168,000 jobs in January, showing a figure of 246,000. However, the ADP figures have not been a very good predictor of the actual jobs reports. U.S. ISM Manufacturing index advanced to 56 in January from 54.5 in the previous month. Pundits had expected a reading of 55. Crude oil inventories rose 6.5 million barrels for the week ended January 27, registering the fourth consecutive weekly expansion in stockpiles. As expected, the U.S. Federal Reserve did not raise its key interest rate at the end of its two-day meeting on Wednesday, keeping the benchmark in a range between 0.50% and 0.75%. However, it admitted that optimism increased among businesses and consumers. Unemployment claims of 246,000 came in lower than 251,000 expected, a further sign of an improving labor market. The Bank of England kept interest rates steady, as it raised its forecast for economic growth for the years ahead. Also, it predicted inflation will overshoot its target of 2% over the next months, but made clear it would not raise interest rates as a result. The U.K. Parliament voted in favor of triggering Article 50 by a wide margin, allowing Prime Minister Theresa May to start Brexit negotiations as soon as she sees fit.

Risk Appetite Review

The broad market (SPY A) has fallen 0.72% since last Thursday, as the Trump-induced rally has run its course. Low Volatility ETF (SPLV A) fell 0.12%, representing the best performance. High Beta ETF (SPHB B-) was the worst performer from the pack, dropping 2%. To see how these indices performed last week, read ETF Scorecard: January 27 Edition.

Major Index Review

Markets were all down for the week, with a single exception. Emerging markets (EEM A-) has jumped 0.21% over the past five days, extending monthly gains to 6.02%. The asset class was the best performer for both the week and the rolling month helped by gains staged by Brazil, China and India, all up consistently over the past month. iShares Russell 2000 Index (IWM B+) was the worst weekly performer, down 1.43%, as investors started to reverse their long Trumponomics bets. The index had been boosted the most by the Trump victory because of his promise to help American small businesses. The index remains up more than 13% since Trump won the U.S. presidency in November. (IWM B+) is also the worst performer for the rolling month – down 1.23%.

Foreign Equity Review

Foreign equities were all down, with one exception. India (EPI B+) bucked the trend this week, rising an impressive 1.91%, as foreign investors flocked to the nation’s equities, encouraged by robust corporate earnings and a strong rupee. Brazil (EWZ B+) was the best performer for the rolling month, jumping 9.57%, as commodity prices held up and the domestic political environment improved. Russia (RSX B+) was the worst performer for the week and rolling month, falling 1.36% and 0.18%, respectively, as Trump signaled he will not lift sanctions on the country in the immediate term. 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 have posted mixed results. Silver (SLV C+) and gold (GLD A-) were again the best performers this week, up 2.58% and 4.15%, respectively. The demand for the shiny metals increased on undervaluation coupled with perceived risks stemming from a Trump presidency. Silver is also the best performer for the rolling month, up 8.59%. Natural gas (UNG B-) has been worst performer from the pack, after being the best performer in the previous week. (UNG B-) has fallen 4.10% since last Thursday, extending monthly losses to 7.34%. Supplies are currently above the five-year average, while fears of a trade war between Trump and Mexico also weighed negatively on the price. U.S. exports around 5% of total gas production to Mexico through pipelines. A disruption could put pressure on domestic supply, sending natural gas tumbling. Use our Head-toHead Comparison tool to- compare two commodity ETFs such as (SLV C+) and (GLD A-) on a variety of criteria such as performance, AUM, trading volume and expenses.

Currency Review

Currencies posted mixed results this week. The Japanese yen (FXY C+) has edged up as much as 2.04% since last Thursday, as demand for its safe-haven status increased on the back of political uncertainty in the U.S. The Australian dollar (FXA A-) was the best performer for the rolling month, rising as much as 6.64%, on recovering commodity prices and an improving Chinese economy. The U.S. dollar (UUP A) was again the worst performer from the pack, down 0.62%, as the Trump trade continued to reverse. (UUP A) is also the worst performer for the rolling month, down 3.44%.

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Disclosure: No positions at time of writing.

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