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ETF Scorecard: January 6 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.

The start of 2017 was not rich in data, but markets moved nonetheless. The big news this week has been the Eurozone inflation, which, at 1.1%, came in above estimates of 1.0%. Core inflation also picked up to 0.9% against 0.8% estimated by analysts. The upward inflation caused a rise in the euro, as investor expectations rose on speculation that the ECB will become more hawkish in the coming period. The next ECB meeting is scheduled for January 19. U.S. Chicago PMI for the month of December stood at 54.6, lower than analysts’ expectations of 57. Germany’s employment outlook improved in December, with the country adding 17,000 jobs. Pundits had predicted that the number of unemployed people would fall by 5,000. Eurozone’s Services PMI was up in December to 53.7 from 53.1 previously, ending the year on a high note. ISM’s Non-Manufacturing Index in the U.S. was flat at 57.2 in December compared to the previous month. Analysts had forecasted a drop to 56.6. ISM’s PM Index in the U.S. rose to 54.3 in the last month of the year from 54.1 in the prior month. U.S. unemployment claims decreased steeply in the last week of the year to 235,000 from a revised 260,000 in the previous week. U.S. crude oil inventories dropped by 7.1 million barrels for the week ending December 30. The U.S. Federal Reserve’s minutes for its December meeting showed that policymakers are uncertain about the future pace of interest rate hikes. However, they revised their forecast to three expected rate increases in 2017 from two previously, largely on the back of the potential effects on the economy of an aggressive fiscal policy promised by President-elect Donald Trump.

Risk Appetite Review

The broad market (SPY A) was up 0.74% in the first week of the year, buoyed by improving data in the U.S. High Beta ETF (SPHB B-) was the best performer, rising 2.18%, in a sign investors embraced risk assets. Low Volatility (SPLV A) was the worst performer, rising just 0.14%.

Major Index Review

Markets were all up for the week and the rolling month. After a few weeks being the worst performer, emerging markets (EEM A-) finally lodged gains this week, rising 2.38%, as commodities continued their recovery in the new year. A strong dollar and rising yields in the U.S. proved a headwind. Up only 1.60% for the rolling month, emerging markets was the worst performer for the trailing 30-day period. Dow Jones (DIA A-) was the worst performer, after topping the list last week. The index rose just 0.25% for the week ending Thursday. (DIA A-), however, remains the best performer for the rolling month, up a strong 3.43%.

Foreign Equity Review

Foreign equities were all up for the week. Brazil (EWZ B+) rose 4.76% last week, representing the best performance from the pack largely because of recovering oil prices. Oil giant Petrobras led the gains along with real estate stocks. (EWZ B+) is also the best performer for the month, up an impressive 10.27%. In 2016, the Brazilian stock market was on a rollercoaster, but ended the year up 61%. The worst performer this week was Germany (EWG B+), which advanced just 1.39%. Although China (FXI A-) staged gains this week, it was the only one to drop for the rolling month, down 3.33%. The country experienced outflows lately in light of a stronger dollar and higher yields in the U.S., but China intervened in the currency market to boost the yuan. To find out more about ETFs exposed to particular countries, check our ETF Country Exposure tool. Select a particular country, such as China, and get a list of all ETFs tracking your country of choice.

Commodities Review

Apart from natural gas, commodities experienced little volatility over the past week. Silver (SLV C+) was the best performer for the week, recovering slightly from a protracted downward drop. The commodity finally hit correction mode and was up 2.54% for the week. Oil (USO A) increased 4.28% over the trailing month, representing the best performance of the pack. The commodity is sitting firm above $50 per barrel, as investors expect OPEC to deliver on its promise to cut supply. Natural gas (UNG B-) dropped like a stone in the past week on fears of mild weather in the U.S. The latest data shows inventories fell less than expected, adding to worries about the demand outlook. (UNG B-) is also the worst performer for the rolling month, down 10.41%. Use our Head-to-Head Comparison tool to compare two ETFs, such as (SLV C+) and (UNG B-), on a variety of criteria such as performance, AUM, trading volume and expenses.

For a full list of commodity ETFs, click here.

Currency Review

Currencies have arguably been the most interesting assets to watch lately, thanks to the volatility sparked by the U.S. dollar. The Australian dollar staged the best gains this week, up 1.75%, boosted by upbeat Chinese data and rising commodity prices. The U.S. dollar (UUP A) was the single faller this week, dropping 0.83%, retracing some of its earlier gains. However, pundits expect the greenback to continue rising on the back of higher interest rates and expected fiscal stimulus in the U.S. (UUP A) was the best performer for the rolling month, up 1.08%. The British pound (FXB A-) lost 2.68% of its value over the past month on uncertainty regarding the Brexit process.

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Disclosure: No positions at time of writing.

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