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 was full of both economic and data events. The U.S. announced plans to impose tariffs on $50 billion of Chinese goods, triggering fears of a trade war with China that led to a stock market plunge. President Donald Trump asked U.S. Trade Representatives to come up with a list of Chinese goods that will face import levies. Amid trade war worries, the U.S. Federal Reserve hiked interest rates by 25 basis points to a range between 1.50% and 1.75%. Led by newly-installed Jerome Powell, the Fed telegraphed a more aggressive path to raising interest rates and increased its 2018 GDP forecasts from 2.5% growth to 2.7%. Meanwhile, the Central Bank expects inflation to run near its target of 1.9% in 2018 and rise slightly higher in the years after. Across the Atlantic, the Bank of England kept interest rates on hold at 0.5% as lower inflation figures and modest wage increases convinced policymakers that now is not the right time to act. However, the Central Bank strongly hinted that the conditions for a rate hike might be met in the near future. U.S. housing starts fell 7% in February to 1.23 million, disappointing analysts’ expectations of 1.28 million. The weak figure comes after a blockbuster report in January of 1.32 million starts. Building permits also dropped considerably, by 5.7%, to 1.29 million. Economists had forecasted 1.32 million permits in February. European CPI continued to disappoint, with the final figures coming in 0.1% percentage points lower than expected at 1.1% in February. Consumer CPI in the UK dropped to 2.7% in February compared to 3% in the previous month, as the entire developed world experienced lower inflation. U.S. existing home sales rose 3% month-over-month in February and 1.1% compared to the same period last year to 5.54 million. The report is a rare bright spot in an otherwise bleak data environment. Crude oil inventories have ended a three-week positive streak, falling in the five-day period through March 16 by 2.6 million barrels. As a result of the drop, inventories remain 19.7% below their levels a year ago. U.S. unemployment claims came in at 229,000 for the week ended March 17, higher than consensus estimates of 225,000.
Risk Appetite Review
Markets were in sell-off mode this week due to fears of a global trade war. The broad market (SPY A) was the worst performer in the past five days, declining by nearly 4%. Unsurprisingly, Low Volatility (SPLV A) posted the smallest losses, down 2.38%. Sign up for ETFdb.com Pro and get access to real-time ratings on over 1,900 U.S. listed ETFs.
Major Index Review
As expected, global equities were all down. Technology stocks (QQQ A-) were the worst performers this week due to a double whammy; Facebook tumbled after the eruption of a scandal involving the improper use of user data and Trump promised to tax $50 billion of Chinese imports. (QQQ A-) fell 5.23%. Small cap stocks (IWM B+) are the best performers both for the week and the rolling month, down 2.31% and up 0.52%, respectively. Because of their limited exposure to international trade, the blow from a potential trade war is expected to be limited. Dow Jones (DIA A-) is the worst monthly performer with a decline of 4.42%. To see how these indices performed a week before last, check out ETF Scorecard: March 16 Edition.
Sectors were all down, with one exception. The energy sector (XLE A) was the best performer for the past five days and the only riser, up 0.64%, thanks to increasing oil prices. The technology sector (XLK A) is the worst performer for the week, down as much as 5.39%. For the rolling month, the telecom industry (XTL A) fared the best, posting gains of 1.33%, while consumer staples (XLP A) was the worst with losses running above 6%.
Foreign Equity Review
Foreign equities were all down. After being the worst performer, Russia (RSX B+) was largely shielded from the global sell-off thanks to rising oil prices. (RSX B+) is down just 0.13% this week. As a result of the small drop, Russia is also the best monthly performer, falling 1.82%. China (FXI A-), which was on the receiving end of import tariff threats from the U.S., dropped the most this week by 3.64%. For the rolling month, however, India (EPI B+) remains the worst performer, tumbling 4.13%. 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 mixed. Oil (USO A) recorded impressive gains this week, surging by 4.86%, after Saudi Arabia and Russia signaled that the production curbs introduced in 2017 will be extended to 2019 to stabilize the market. As a result of the news, (USO A) is also the best performer for the rolling month, up 4.27%. Copper (JJC A), meanwhile, is the worst performer, tumbling 3.4% this week and 6.55% for the rolling month, amid trade war fears. Use our Head-to-Head Comparison tool to compare two ETFs such as (USO A) and (JJC A) on a variety of criteria such as performance, AUM, trading volume and expenses.
The British pound (FXB A-) advanced the most this week, by 1.17%, as the Bank of England hinted that a rate hike might come soon. The Australian dollar (FXA A-), meanwhile, is the worst performer both for the week and the rolling month, down 0.56% and 2.39%, respectively, as a potential trade war between China and the U.S. would have a negative impact on the Australian economy, which depends on Chinese exports. For the rolling month, the Japanese yen (FXY C+) remains the best performer, up 1.60%.
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Disclosure: No positions at time of writing.