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ETF Scorecard: March 24 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.

It’s official. UK will trigger Article 50 on March 29, setting the two-year countdown until the nation’s exit from the European Union. In a few days, negotiations will begin on Britain’s future relationship with the EU, and the rift between the sides could not be larger. Prime Minister Theresa May will try to get the best of both worlds – total control over immigration and free access to the single market. Meanwhile, the EU will stand by its position that free access to the single market comes only with the full opening of the labor market. Tough negotiations ahead. UK has also been the target of a terrorist attack this week. The Parliament was ambushed by a lone wolf who was disarmed shortly after killing a police officer. Minutes earlier the same day a car rushed onto the sidewalk of Westminster Bridge, wounding several people. Although the news made the headlines across the world, the markets did not react. In a sign of globalization’s dire state, the world’s leading finance ministers failed to agree on a joint statement promoting free trade and condemning protectionism at the G20 meeting. U.S. Secretary of Treasury Steve Mnuchin was reportedly the culprit, although he played down that there were tensions on trade between the U.S. and other states. U.S. consumer sentiment for March improved to 97.6 from 96.3 previously, beating the consensus forecast of 97.2. U.S. industrial production growth for February was flat, disappointing analysts, which expected a 0.2% advance. In the previous month, industrial production fell 0.3%. U.S. existing home sales stood at 5.48 million in February, lower than estimates of 5.55 million. The figure represents a drop of 3.7% month-over-month and a rise of 5.4% compared to the same period last year. U.S. crude stockpiles have increased again this week, after a small decline in the prior week. For the week ending March 17, crude stocks rose by five million barrels, putting pressure on oil prices. U.S. unemployment claims for the week ending March 18 came in at 258,000, below consensus of 240,000. New home sales in the U.S. advanced 592,000 in February, trumping forecasts of 565,000. In January, new home sales advanced 555,000. Germany’s producer price index increased 2.4% year-over-year in January. Compared to the previous month, the nation’s PPI advanced 0.2%, marking the fifth consecutive monthly increase. UK’s CPI accelerated to 2.3% in February, surprising analysts, which expected a rise of 2.1%. Britain’s inflation is now above the central bank’s target of 2%, although it may not prove enough for it to raise interest rates. The report, however, boosted the pound. UK retail sales advanced 1.4% in February, beating predictions of a 0.4% rise. Retail sales fell in the previous two months.

Risk Appetite Review

The broad market (SPY A) was down 1.56% this week, in what was a long awaited correction. Most likely, investors started to question whether Donald Trump will be able to deliver on his promised tax cuts and infrastructure spending, as his campaign managers face increased scrutiny over their Russian ties. In addition, the auto loan industry has been soft lately, with Santander Consumer recently posting a rise in delinquency rates. High Beta (SPHB B-), the riskiest ETF of the pack, has dropped 3.49% over the past week, representing the worst performance. As expected, Low Volatility (SPLV A) was the best performer, falling 0.27%. Sign up for ETFdb Pro and get access to real-time ratings on over 1,900 U.S. listed ETFs.  

Major Index Review

Global equities were all down this week, with the exception of emerging markets, which ticked up slightly. Emerging markets (EEM A-) was again the best performer this week, advancing 0.28%, after jumping 4.41% in the previous week. Most likely, investors in emerging markets were emboldened by the relative dovishness of the Federal Reserve, which signaled three rate hikes this year instead of the four expected. Emerging markets was also the best performer for the rolling month, up 2.81%. iShares Russell 2000 Index (IWM B+) continued its downward slide this week, dropping 2.43%. Evidently, the index has stumbled lately along with President Donald Trump, who may have a hard time getting his ‘America First’ agenda implemented. (IWM B+) is also the worst performer for the rolling month, down 3.3%. To see how these indices performed last week, check out ETF Scorecard: March 17 Edition.  

Foreign Equity Review

Foreign equities were all down, with the exception of Russia. Russia (RSX B+) has advanced 0.73% since last Thursday, just as all its other peers declined. Before this week, the nation’s equities had been beaten up. Indian equities (EPI B+) are up 5.71% for the rolling month, as Prime Minister Narendra Modi’s victory in state elections boosted investor confidence. For more on Modi’s stunning win, check Trending: Airlines Take a Hit as Winter Storm Stella Pummels Northeast. Brazil (EWZ B+) has tumbled 8.48% this month, with nearly half of the losses occurring this week. Investors started to worry about the Brazilian government’s ability to implement painful but market-friendly reforms, after several people close to high-ranking senators saw their offices raided by the federal police. The raid was part of a widening corruption investigation on high-level officials. 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 Review

Commodities posted mixed performance this week. Natural gas (UNG B-) recovered somewhat. The 4.8% jump on declining stockpiles helped the commodity post the best monthly performance, skyrocketing 9.91%. On Thursday, the U.S. Energy Information Administration (EIA) reported that natural gas inventories declined 150 billion cubic feet for the week ending March 17, slightly missing analysts’ estimates of a 153 bcf drop. Oil is evidently falling out of favor with investors, after latest U.S. inventory data showed stockpiles resumed their upward climb this week. (USO A) has dropped 3.93% this week, extending monthly losses to as much as 13.93%. Use our Head-to-Head Comparison tool to compare two ETFs such as (USO A) and (UNG B-) on a variety of criteria such as performance, AUM, trading volume and expenses.  

Currency Review

The Japanese yen (FXY C+) was the king, as investors flew to safety following a small global equity selloff. Since last Thursday, the yen has risen 1.93%, extending 30-day gains to 2.38%. The Australian dollar (FXA A-) was the worst performer this week, declining 0.87%. The U.S. dollar (UUP A) has dropped 1.76% for the rolling month on a less hawkish than expected Federal Reserve.  

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Disclosure: No positions at time of writing.

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