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ETF Scorecard: May 5 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.

Investors are preparing for the moment of truth this Sunday, when France will choose its next President. The two candidates, Emmanuel Macron and Marine Le Pen, could not have a more divergent views of France’s future. Macron, who is campaigning on a platform of opening up the economy to spur competition, is the market’s favorite. Le Pen, meanwhile, with her anti-Europe, anti-immigrant proposed policies, would be a nightmare for investors. To investors’ joy, Macron is leading in the polls by a wide margin, of around 40% to 60%. For more on the French election vote this weekend, read The Best ETFs to Play the French Election. Here at home, the Federal Reserve left interest rates unchanged at its meeting this week, but hinted the door is open for a June hike. The Fed was upbeat on the economy, suggesting economic weakness lately was transitory. It also said it hopes to release a plan later this year on how to unwind its huge $4.5 trillion balance sheet. In the U.S., the healthcare bill to repeal and replace Obamacare passed in the House of Representatives by a low margin. Next, a vote should be held in the Senate, where it has a lower chance of passing in its current form. UK GDP has slowed down markedly in the first three months of the year, posting a growth of just 0.3% compared to 0.7% in the previous quarter. The weakness of the pound following the Brexit referendum has hit the spending power of Britain’s households, resulting in lower aggregate demand. U.S. GDP has also slowed in the first quarter, rising just 0.7% and surprising analysts, who on average expected 1.1% growth. In the previous quarter, GDP rose 2.1%. Poor automobile sales and weak overall consumer spending has taken a toll on the GDP this quarter. Euro-area inflation rose to 1.9% in April from 1.5% in March, moving closer to the European Central Bank’s target of 2%. Core CPI, a measure at times more important for the ECB, increased to 1.2% from 0.7% in the previous month. U.S. consumer sentiment also disappointed, coming in at 97. Forecasters were expecting a showing of 98. U.S. PMI Manufacturing index dropped to 52.8 in April from 53.3 in the previous month. The downbeat figure was in line with expectations. ISM Non-manufacturing PMI showed signs of acceleration in April, rising to 57.5. In the previous month, the index stood at 55.2. UK manufacturing PMI advanced to 57.3 in April, beating forecasts of 54, despite broad economic weakness stemmed from the pound’s depreciation. ADP estimated the U.S. economy added 177,000 jobs in April, largely in line with estimates. U.S. crude oil inventories have fallen for the fifth straight week. For the week ended April 28, crude stockpiles dropped by 0.9 million barrels. U.S. unemployment claims came in at 238,000 for the week ended April 29. Consensus estimate was for 246,000.

Risk Appetite Review

The broad market (SPY A) was down slightly this week by 0.06%. There has been a large disparity between the performance of the four indexes, with High Beta (SPHB B-) posting the worst results (down 1.5%) and (SPY A) the best. 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 have posted mixed results. iShares MSCI EAFE Index Fund (EFA A) has jumped 1.53% during the week, helped by the positive performance of European equities. Investors have remained optimistic this week that the French election will be won by Emmanuel Macron, an independent candidate proposing market-friendly reforms. (EFA A) was also the best performer for the rolling month, up 4.75%. iShares Russell 2000 Index (IWM B+) came in as the worst performer this week with a loss of 2.08%, as the U.S. economy has shown signs of weakness of late. Emerging markets (EEM A-) has been the worst monthly performer for three consecutive weeks. (EEM A-) is up by just 0.83% over the past 30 days. To see how these indices performed last week, check out ETF Scorecard: April 28 Edition.

Foreign Equity Review

Foreign equities were mixed this week. Germany (EWG B+) is the best performer for the second consecutive week, as investors continue to buy the nation’s equities on expectations the populism wave will fade once Macron wins the French election on Sunday. (EWG B+) is up 2.25% for the week and as much as 6.36% for the rolling month. Russia (RSX B+) is at the opposite end of the performance spectrum, posting the worst results both for the week and the rolling month. (RSX B+) is down 3.94% over the past five days and as much as 4.58% for the rolling month, largely because of a steep drop in oil prices. 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 were all down with one exception. Oil (USO A) has dropped a whopping 8.07% this week on renewed fears a supply glut will not abate anytime soon. The dramatic fall was exacerbated by OPEC members’ hinting they will likely leave output cuts at current levels. Oil is also the worst monthly performer, with a drop of around 11%. PowerShares DB Agriculture Fund (DBA A) was the only gainer both for the week and the rolling month, up 2.14% and 1.94%, respectively. 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.

Currency Review

Currencies posted mixed results. Euro (FXE A) is the best currency for the second consecutive week on expectations Macron will win the presidential election in France. The euro advanced 0.68% over the past five days. The British pound (FXB A-) has seen gains of 3.73% for the past 30 days, although it began to retract following weak GDP data for the last quarter, which pointed to a marked slowdown of economic activity. The Australian dollar (FXA A-) was the worst performer both for the week and the rolling month, primarily because of weak commodity prices. (FXA A-) has fallen 0.76% in the past week and as much as 2% in the last 30 days.

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Disclosure: No positions at time of writing.

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