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.
- Spain made the headlines this week with drama surrounding Catalonia’s bid for independence. The breakaway region stopped short of declaring independence, after Spain’s government threatened to arrest President Carles Puigdemont and strip the region of its autonomy. Puigdemont said he decided to delay the declaration of independence because he wanted to find an amicable solution with Spain, which declines to talk until Catalonia gives up on the independence bid altogether.
- The U.S. unemployment rate edged lower in September, despite the fact that the economy lost jobs. The rate stood at 4.2% compared to 4.4% in August, while nonfarm payrolls dropped 33,000. The reason for the disparity is the fact that data for unemployment and payrolls are compiled separately. The drop in nonfarm payrolls was primarily due to the negative effect of Hurricanes Harvey and Irma. The participation level also climbed from 62.8% to 63.1%.
- U.K. manufacturing production rose 0.4% in September, firmly higher than analysts’ expectations of 0.2%. The upbeat figure came despite bitter internal disputes in Theresa May’s coalition over Brexit.
- Federal Reserve minutes for the last meeting revealed that another rate hike this year is likely, despite a drop in inflation. A majority of participants were of the opinion that low inflation is temporary and a tight labor market will lead to an increase in inflation over the medium term. Also, policymakers believe that part of the softening in inflation was due to transitory factors.
- Jobless claims declined 15,000 to 243,000 for the week ended October 7, in what was another strong report indicating the strength of the U.S. labor market.
- U.S. Producers Price Index advanced 0.4% in September, reaching annual gains of 2.6%.
- Crude oil inventories fell 2.7 million barrels in the week ended October 6.
Risk Appetite Review
- Low volatility assets (SPLV ) gained the most this week, advancing 0.84%.
- The broad market (SPY ) saw tepid gains of 0.19%.
- Equal weight (RSP ) was the only faller with a small drop of 0.08%.
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Major Index Review
- Emerging markets (EEM ) spiked 1.76%, the best performance for the week, as the U.S. dollar gave up some gains. The performance happened despite Turkey’s spat with the U.S. China’s performance helped the asset class, with the country’s central bank signaling its intention to ease monetary policy.
- Russell 2000 (IWM ) is the only faller this week, down 0.05%, although the small-cap index is up 6.1% for the rolling month, largely due to renewed hopes that U.S. Republicans will cut corporate taxes.
- For the rolling month, the technology index (QQQ ) is the worst monthly performer, posting a gain of 1.04%.
- To see how these indices performed last week, check out ETF Scorecard: October 6 Edition.
- Utilities surged the most this week, as apparently investors sought safe havens. (XLU ) advanced 2.46% this week, recouping some of the losses posted previously. However, utilities (XLU ) is the worst performer for the rolling month with a loss of 2.26%.
- The financial sector (XLF ) gave up some of the gains experienced in prior weeks, dropping 1.02%. However, (XLF ) remains the best monthly performer with an advance of 6.14%, largely thanks to a signal by the Federal Reserve that it will raise rates one more time this year.
Foreign Equity Review
- Foreign equities were mixed.
- Surprisingly, British equities (EWU ) outperformed its other peers, surging 1.88% for the week, despite Brexit woes. Good manufacturing data could be one of the plausible reasons behind this week’s rise.
- Chinese stocks (FXI ) are the best monthly performer with a gain of 3.17%, in no small part thanks to the central bank’s hint that it would ease monetary policy.
- Russia (RSX ) was flat this week compared to the previous five-day period, while India (EPI ) was the worst monthly performer with a fall of 2.44%.
- To find out more about ETFs exposed to particular countries, use 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 all up this week.
- Silver (SLV ) outshined all other commodities, posting gains of 3.77%, as investors flocked to safe-haven assets in light of Spain’s Catalonia crisis. This week’s gains, however, were not enough to erase monthly losses. Silver is the worst performer for the last 30 days, down 3.39%.
- The agriculture fund (DBA ) was up 0.26%, the smallest gain from the bunch.
- Oil (USO ) was the best monthly performer with an advance of 4.07%, helped by signs of market rebalancing and short-term supply disruptions in the U.S.
- After a few positive weeks, the U.S. dollar (UUP ) disappointed again, falling 1.10% in the past five days. Weak economic data combined with pessimism that Republicans will succeed at overhauling the tax code weighed negatively on the greenback. Still, the dollar remains king for the rolling month, with a surge of 1.30%.
- The British pound (FXB ) posted the best gains this week, up 1.62%, thanks to improving economic data.
- The Australian dollar (FXA ) is the worst performer for the rolling month, down 2.38%.
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