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.
If investors longed for a peaceful and reflective holiday, they were in for a disappointment. The stock market swung wildly as worries regarding a slowdown in China and the U.S. government shutdown prompted investors to run for the exits. The U.S. House of Congress has passed a funding bill to end the partial government shutdown, after the Democrats and President Donald Trump sparred over funding for a wall along the Mexico border. The bill does not contain funding for Trump’s wall. The U.S. Senate, which is controlled by Republicans, is unlikely to back the bill until the White House and Congress reach an agreement. Apple has unexpectedly cut its revenue forecast, citing unforeseen weakness in the Chinese market. Acting as a bellwether for the global economy, Apple’s news triggered a wave of selling across technology equities. U.S. consumer confidence dropped eight points in December to 128.1, disappointing analysts who had expected a showing of 133.7. U.S. unemployment claims surged to 231,000 for the week ended December 30, the highest number since the end of November. Analysts had forecast 220,000 claims. The U.S. manufacturing purchasing managers’ index dropped to a two-year low in December to 54.1. Such a low figure has not been seen since December 2016. Pundits had expected the index to come in at 57.7. The job market remained healthy in December, at least according to ADP. The agency said the U.S. economy added as many as 271,000 jobs in the past month, the highest showing since March 2017.
Risk Appetite Review
The markets were a little up this week, after whipsawing wildly in the runup to New Year’s Eve. Low volatility (SPLV A) is the worst performer with flat gains. Meanwhile, Equal weight (RSP B+) is up 0.87%, the best performance, while the broad market (SPY A) rose 0.68%.
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Major Index Review
Major indexes were mixed. Technology equities (QQQ A-) are the worst performers for the week, losing 0.50% of their value, in no small part due to the carnage that took place following Apple’s revenue warning. The small-cap index (IWM B+) has recouped some of the losses from previous weeks, rising 1.52%. However, (IWM B+) is the worst performer for the rolling month, down nearly 14%. European and Australasian stocks (EFA A) declined 8.14% in the past 30 days, representing the best performance.
To see how these indices performed over the past year, check out ETF Scorecard: Annual Review of Major Indexes
The tech sector (XLK A) has been beaten up recently, with XLK tumbling 2.26% and 14.59% over the past week and month, respectively. Meanwhile, the energy sector (XLE A) was the best performer with an advance of 3.32%. Utilities (XLU A) were the best performers for the rolling month, although the benchmark index dropped 7.62%.
Foreign Equity Review
Brazil (EWZ B+) jumped 11.38% in the past week, as investors welcomed the new President, Jair Bolsonaro, for his promise to implement market-friendly reforms. The weekly gain propelled Brazil to the best performer status for the rolling month with an advance of 1.74%. China (FXI A-), meanwhile, is the worst performer for the week and the rolling month, down 1.35% and 10.96%, respectively, on mounting worries about an abrupt economic slowdown.
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Oil (USO A) is the best weekly performer with a gain of 3.75%, not far from silver. However, the black commodity remains one of the worst performers for the rolling month. Natural gas (UNG B-) tanked 14.75% in the past five days, extending monthly losses to 33.8%. Silver (SLV C+) has benefited from its safe-haven status, rising 7.35% for the rolling month and becoming the best performer.
The Japanese yen (FXY C+), another asset that performs well in times of market turbulence, is the best performer both for the week and the rolling month, up 3% and 4.9%, respectively. The euro (FXE A) has lost 1.73% of its value over the past five days, while the Australian dollar (FXA A-) is the worst performer for the rolling month, down nearly 5%.
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Disclosure: No positions at time of writing.