|Bid||23.83 x 94200|
|Ask||23.84 x 91000|
|Day's Range||23.83 - 23.88|
|52 Week Range||23.09 - 25.76|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.76%|
The Japanese yen (JYN) continued its depreciating trend in the previous week. Risk aversion receded and the US dollar rallied following higher bond yields and commodity prices. Now that geopolitical risks have declined, the demand for the yen as a safe haven will likely be low and could lead to more depreciation.
The British pound (FXB) depreciated 1.7% against the US Dollar (UUP) for the week ending April 20. The pound (GBB) closed the week ending April 20 at 1.40—compared to a close of 1.42 for the week ending April 13. Softer-than-expected retail sales, wage growth, and consumer prices dented investors’ confidence. Bank of England Governor Mark Carney gave a hint that the interest rates don’t need to be increased in May. Carney’s comments, weak data, and the strong US dollar led to the pound’s sharp depreciation the previous week.
The euro-US dollar (FXE) exchange rate closed the week ending April 20 at 1.23. The exchange rate depreciated 0.35% against the US dollar (UUP). The US dollar appreciated last week. The euro was stuck by weaker-than-expected economic data and dovish comments from German Bundesbank Chairman Jens Weidmann and European Central Bank Chairman Mario Draghi. Weidmann said that the first quarter growth in Germany wasn’t expected to be good. Draghi said that the Eurozone’s expansion cycle might have peaked.
The US dollar (UUP) gained some lost ground last week due to reduced risk aversion, rising bond yields, weak economic data from global peers, and higher commodity prices. The US dollar rallied after bond yields started to rise and the ten-year yield broke past the February 2018 high. Economic data from the US included an acceptable level of retail sales and an optimistic Federal Beige Book. The US Dollar Index closed above 90.0 for the first time in five weeks and posted a weekly gain of 0.65%.
On April 13–20, 2018, US crude oil June futures rose 1.6% and settled at $68.4 per barrel on April 20, 2018. During this period, US crude oil tracking ETFs and ETNs had the following returns: The United States 12 Month Oil ETF (USL) rose 1.9%. The PowerShares DB Oil ETF (DBO) rose 1.9%. The Credit Suisse X-Links WTI Crude Oil Index ETN (OIIL) rose 1.7%.
On one hand, it has increased US growth projections due to the stimulus from tax cuts. Since these tax cuts are unfunded, the IMF believes that there will be a need for severe spending cuts in the coming years. It predicts that the US debt-to-GDP (gross domestic product) ratio will expand to 116.9% by 2023, surpassing Italy’s ratio, which should narrow to 116.6% by 2023.
The S&P 500 rose ~0.1% to 2,708.64 on April 18, 2018. The index rose slightly due to bullish momentum in the energy and industrial sectors. Five out of ten major sectors in the S&P 500 rose on April 18, 2018.
The Japanese yen (JYN), a safe haven asset, has failed to appreciate despite an increase in uncertainty in recent weeks. Despite ongoing trade war concerns and the US-led attack on Syrian chemical weapon facilities, the yen fell. In the week ended April 13, the yen (FXY) closed at 107.3 against the US dollar (UUP), depreciating by 0.38%.
The US Dollar Index fell ~0.1% to 89.5 on April 10–17, 2018. WTI crude oil prices increased ~1.5% on April 10–17, 2018. The depreciating US Dollar Index helped oil prices during this period.
The S&P 500 rose ~1.1% to 2,706.39 on April 17, 2018, due to optimism about strong 1Q18 earnings results. Analysts estimate that S&P 500 companies’ earnings could rise 18.6% in 1Q18, which would be the highest increase in seven years, according to Reuters. Nine out of the ten major sectors in the S&P 500 rose on April 17, 2018.
The British pound (FXB) appreciated by 1.1% against the US dollar (UUP) in the week ended April 13. The rise of the British pound despite soft economic data was because of hawkish comments from the Bank of England, which is expected to increase interest rates soon. While British equity markets (BWX) were impacted by increased trade war concerns, indexes managed to close in positive territory for a third consecutive week.
The euro-US dollar (FXE) exchange rate closed the week ended April 13 at 1.2, with the euro appreciating 0.39% against the dollar (UUP). The European currency, which failed to capitalize on the weaker US dollar, was impacted by soft economic data and cautious comments from the ECB (European Central Bank). The ECB keeps pushing away any talk of tightening, leaving investors wanting more as the economy seems to be on a continued path of recovery.
Yesterday, Donald Trump accused Russia and China of devaluing their currencies. Trump tweeted that China and Russia are playing “the currency devaluation game as the U.S. keeps raising interest rates. Not acceptable!” Investors should note that this is a contradiction of the US Treasury, which had maintained that no major trading partners are manipulating their currencies.
One of the market indicators for gold that has been consistently playing a significant role in the determination of the directional move for precious metals is the US dollar, depicted by the Dollar Index (or DXY). The other three precious metals have fallen. The above chart shows the inverse relationship between the dollar and VXY over the past month. The relationship between precious metals (IAU) (SLV) and the US dollar (UUP) remains negative.
The S&P 500 rose ~0.8% to 2,677.84 on April 16, 2018, due to easing geopolitical tensions in the Middle East and optimism about strong 1Q18 earnings results. All of the 11 major sectors in the S&P 500 rose on April 16, 2018. The subsector classification is based on the S&P 500 GICS (Global Industry Classification Standard) indices.
On April 6–13, 2018, US crude oil May futures rose 8.6%—the largest weekly gain since July 28, 2017. On April 13, 2018, US crude oil May futures settled at $67.39 per barrel—the highest closing level for US crude oil active futures in more than three years.
The S&P 500 rose ~0.8% to 2,663.99 on April 12, 2018, due to optimism about strong 1Q18 earnings results. Six out of the 11 major sectors in the S&P 500 rose on April 12, 2018.
Although commodity costs were higher in fiscal 1Q17 than in fiscal 1Q18, and they are expected to be lower in fiscal 2018, HP (HPQ) expects increasing DRAM (dynamic random access memory) prices to remain a headwind during the year. However, HP expects product demand to fall if it transfers component price increases to consumers.
The non-farm payrolls for March rose by 103,000, which was below the consensus expectation of 193,000 jobs being added and way below the February number of 326,000 jobs. The unemployment rate for March remained unchanged at 4.1%.
The last FOMC (Federal Open Market Committee) meeting was on March 20–21, 2018. At the meeting, the target range for the federal funds rate increased 0.25% to 1.50%–1.75%. The decision to increase the rate was made after Fed members assessed current economic conditions and the outlook for economic activity. The decision to increase the interest rates was unanimous.
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 US Dollar Index depreciated ~0.7% to 89.5 on April 3–10, 2018. WTI crude oil prices increased ~3.2% on April 3–10, 2018. The depreciating US Dollar Index supported oil prices during the same period.