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ETF Scorecard: September 15 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.

This week was marked by the twin hurricanes in the U.S. and their impact on economic growth. Hurricane Harvey brought about significant damages in Texas, prompting a host of oil refineries to temporarily shut operations. Subsequently, Hurricane Irma hit Florida, and although it had been expected to be even more devastating than Harvey, it missed Miami and faded in a less populated direction, lending respite to insurance stocks. Britain’s central bank may finally lift interest rates after a series of false starts over the past years. According to minutes from Bank of England’s meeting, policymakers believe it is appropriate to raise interest rates in the coming months. Although economic growth is facing uncertainty due to Brexit, inflation has been picking up and the labor market has been strengthening. For now, BoE kept interest rates unchanged at 0.25%. Manufacturing production in the U.K. rose 0.5% in August month-over-month, beating expectations of 0.3%. The upbeat figure comes after zero growth in the previous month. U.K. Consumer Price Index continued its march forward, rising to 2.9% in September compared to the same period last year. U.S. Consumer Price Index picked up in August, jumping 0.4% from the previous month. Year-over-year, CPI stands at a healthy 1.9%, very close to the Federal Reserve’s target of 2%. Core CPI rose 0.2% month-over-month and 1.7% year-over-year. The twin hurricanes caused volatility in jobless claims. For the week ended September 14, around 284,000 people filed for unemployment insurance, down from 298,000 in the previous week. Crude oil inventories rose for the second consecutive week, as the twin hurricanes dented demand from refineries. Stockpiles rose by 5.9 million barrels for the week ended September 8. Meanwhile, gasoline supplies dwindled by 8.4 million barrels. Chinese industrial production disappointed in August, registering growth of 6% compared to analysts’ expectations of 6.6%.

Risk Appetite Review

Risk-taking returned to Wall Street this week. High Beta (SPHB B-) was the best performer for the week, surging 2.13%. Low volatility (SPLV A), meanwhile, posted a subpar performance, advancing just 0.44%. The broad market (SPY A) rose 0.88%, hovering near record highs on investor optimism that the twin hurricanes would not be as devastating as expected.

 

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Major Index Review

Global equities were all up. Dow Jones (DIA A-) was surprisingly the best performer this week, rising 2.16%. (DIA A-) recovered some of the losses recorded in the previous week, when it was the worst performer. As a result of the poor performance in the previous weeks, (DIA A-) posted the smallest gains for the past 30 days, rising just 0.79%. Emerging markets (EEM A-) are again the best performer for the rolling month with a rise of 4.60%. The technology index (QQQ A-) tepidly jumped 0.19%, representing the worst performance for the week. (QQQ A-) was dragged down by Apple (AAPL), as the tech giant’s latest product, the iPhone X, underwhelmed investors. To see how these indices performed last week, check out ETF Scorecard: September 8 Edition.

 

Sectors Review

The financial sector (XLF A) is this week’s investor darling, after being shunned last week. Clearly, the performance of insurance stocks had a positive impact, as the damage from the twin hurricanes had been overstated. (XLF A) rose 3.77% in the past five days, posting the best performance from the pack. The telecom sector was the least-liked industry this week, with (XTL A) advancing just 0.03%. Telecom stocks also had the worst month, falling nearly 3%. Materials (XLB A) gained 4.35% for the rolling month, largely thanks to expectations of an increase in orders from hurricane-torn Texas and Florida.

 

Foreign Equity Review

Foreign stocks were all up with one exception. Volatile Brazil (EWZ B+) is the best performer both for the week and the rolling month, advancing 1% and 11.5%, respectively. Investors are ignoring the political scandal involving bribery allegations against a host of high rank officials, including President Michel Temer, and are instead focusing on the economy, which has bristled of late. On Thursday, Temer was again charged with racketeering and obstruction of justice. Another vote on whether Temer should face prosecution will take place in the lower house of Congress soon. China (FXI A-) was the single faller for the week, down 0.09%. For the rolling month, Japanese equities (EWJ A) posted the weakest performance, edging up only 1.23%. 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 mixed. Natural gas (UNG B-) was the best performer this week, rising 4.92%, despite lower demand from hurricane-hit Florida and Texas. Silver (SLV C+) is the best performer for the rolling month, as it benefited from a flight to safe havens earlier this month, thanks to the twin hurricanes and a North Korean threat. (SLV C+) is up 6.75% this week. Copper (JJC A) fell off a cliff this week on disappointing import figures from China, which accounts for nearly half of global production. (JJC A) declined 4.27% this week, but remains considerably up for the rolling month. Agriculture (DBA A) is the single faller this month, with a drop of 0.58%. Use our Head-to-Head Comparison tool to compare two ETFs such as (SLV C+) and (JJC A) on a variety of criteria such as performance, AUM, trading volume and expenses.

 

Currency Review

The British pound (FXB A-) surged 1.5% this week on a surprise announcement by Bank of England that it may finally raise interest rates. (FXB A-) is up more than 4% this month, representing the best performance from the pack. The Japanese yen (FXY C+) is the worst weekly performer, declining 2.50%. The U.S. dollar (UUP A) remains the weakest performer for the rolling month, dropping 1.81%.

 

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