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.
Global markets were in correction mode this week, as investors fear the U.S. Federal Reserve will raise interest rates at an accelerated clip. Perhaps, the new Federal Reserve Governor, Jerome Powell, could not have been sworn in at a worse time. On Monday, Powell took the Fed’s reins from Janet Yellen and said his mandate will be to continue to support the economy, the job market and price stability. He also acknowledged that the U.S. economy is in great shape, with inflation and unemployment rates low and healthy economic growth. The Bank of England has kept interest rates at 0.5%, although it strongly hinted that it will start hiking if the economy continues to improve. Policymakers also suggested that they don’t see the need to raise them earlier than previously thought. The U.S. economy added 200,000 jobs in January, making for a pretty impressive report. The figure was 25,000 above analysts’ expectations and 40,000 higher compared to the previous month’s upwardly revised data. The unemployment rate stood at 4.1%, while average hourly earnings made the headlines. Wages rose 0.3% in January compared to December and 2.9% year-over-year, which was in line with estimates. U.K.’s construction sector is close to falling into recession, after the industry’s PMI dropped to 50.2 in January from 52.2 in the previous month. Figures above 50 indicate expansion. U.K.’s services PMI stood at 53 in January, down from 54.2 in the previous month and well below expectations. The U.S. non-manufacturing sector appears to be in great shape, with the ISM Index coming in at 59.9 in January, up from 55.9 in the previous month. Crude oil inventories rose 1.9 million barrels in the week ended February 2, marking the second consecutive weekly increase. U.S. unemployment claims continued their march down, dropping around 8% for the week ended February 3 to 221,000. Analysts had expected 235,000 jobless claims.
Risk Appetite Review
Markets have continued to fall this week. High Beta (SPHB B-) tumbled more than 9% this week, as investors dumped riskier assets at a faster pace. Unsurprisingly, Low Volatility (SPLV A) was the best performer for the rolling week, recording a decline of 7.14%. The S&P 500 (SPY A) whipsawed, ending the week down by as much as 8%. 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 equities all tumbled close to double-digits. Small-cap stocks (IWM B+) fell 6.85% in the past five days, representing the best performance from the pack, close to that of the European shares (EFA A). Technology stocks (QQQ A-) performed the worst, down 8.30% in the past week, although its performance was very close to its peers from the pack. For the rolling month, emerging markets (EEM A-) took the severest hit, tumbling nearly 7%, while Dow Jones (DIA A-) posted the strongest performance, declining only 5.74%, as investors favored blue chips. To see how these indices performed a week before last, check out ETF Scorecard: February 2 Edition.
The telecom sector (XTL A) was again the best performer, falling 4.33%, after weeks of underperformance. Meanwhile, the energy sector (XLE A) was the only asset that posted double-digit losses for both the week and the rolling month, down 10.12% and 11.71%, respectively. The consumer discretionary sector (XLY A) is the best monthly performer, posting a drop of only 2%, as the ETF benefited from strong earnings performance of its constituents in previous weeks.
Foreign Equity Review
Foreign equities posted significant declines. The Chinese stock market (FXI A-) recorded the worst losses from the pack, tumbling as much as 11.5% in the past five days. India (EPI B+), which often moves against the tide, was the best performer with a drop of only 4.11%. (EPI B+), however, remains the worst monthly performer, down 7.10%. For the rolling month, the Brazilian ETF (EWZ B+) remains the best performer, with a small decline of 0.68%, as investors hope economic reforms will be adopted soon despite political turmoil. 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 all down. Agricultural commodities (DBA A) are the best weekly performers for the second consecutive week, dropping just 0.58%. As a result, (DBA A) is also the best performer for the rolling month with a rise of 1.13%. Oil (USO A) has fallen off a cliff this week, posting declines of nearly 8%. For the rolling month, however, copper (JJC A) fell the most, down 5.28%. Use our Head-to-Head Comparison tool to compare two ETFs such as (USO A) and (DBA A) on a variety of criteria such as performance, AUM, trading volume and expenses.
Naturally, the Japanese yen (FXY C+) was the best performer in the current market rout, advancing 1.44%. However, its performance was very close to that of the U.S. dollar (UUP A), which was up 1.42%. The yen was also the best monthly performer, up 3.57%. The Australian dollar (FXA A-) dropped 2.39% in the past five days, due to an underperforming Chinese stock market and weak commodity prices. For the rolling month, the U.S. dollar, (UUP A) still remains the weakest from the pack, down 2.12%.
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