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.
- U.S. stocks surged to record highs this week, helped by upbeat corporate earnings and signs of an improving global economy. The Dow Jones Industrial Average reached a major milestone by closing above 23,000 for the first time ever. The benchmark index has returned more than 17% year-to-date.
- U.S. initial jobless claims plunged to 44-year lows in the latest week, as the labor market recovered from weather-induced volatility caused by Hurricanes Harvey and Irma.
- Shares of Apple Inc. (AAPL) declined Thursday amid concerns over waning iPhone demand and a WSJ report about Apple Watch’s shoddy cellular connection in China.
- On the earnings front, Netflix, Inc. (NFLX) topped analysts’ forecasts and reported a net addition of 5.3 million subscribers for the quarter. That brings the global tally to a whopping 104 million, with plenty of room for further expansion.
- Meanwhile, IBM (IBM) recorded its second-biggest rally in history Wednesday after the technology giant delivered strong Q3 results.
- In geopolitics, the Spanish government has started suspending Catalonia’s autonomy amid signs the region’s leader may declare independence. Catalans voted overwhelmingly in favor of independence at the Oct. 1 referendum.
- In global economic data, China’s gross domestic product (GDP) expanded 6.8% annually in the third quarter, down slightly from the Q2 expansion but in line with forecasts. Meanwhile, industrial production and retail sales grew faster than expected.
- On the currency front, the U.S. dollar strung together a four-day winning streak into Wednesday’s session, but has since declined in back-to-back days. This has helped shore up precious metals after plunging to one-week lows on the Comex division of the New York Mercantile Exchange.
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Risk Appetite Review
- On Wall Street, investors’ risk appetite remained elevated this week, with markets overcoming a volatile Thursday open. From a risk perspective, the S&P 500 Index (SPY ) was the best performer this week, tacking on 0.25%.
- Equal-weighted indices (RSP ) also finished in positive territory, adding 0.14%.
- The High Beta (SPHB ) category was the lone decliner, falling 0.20%.
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Major Index Review
- The Dow Jones 30 (DIA ) was Wall Street’s best performer this week after several blue chips reported solid third-quarter results. The Dow’s five-day return amounted to 1.29%, extending its monthly gain to 3.71%.
- The technology sector (QQQ ) finished slightly lower this week, as Apple and other tech players fell. As a result, QQQ fell 0.06% this week.
- It has been a mediocre week for global equity markets, with the iShares MSCI Emerging Markets Index (EEM ) falling 1.22%. The iShares MSCI EAFE ETF (EFA ) of developed-nation large and mid caps also finished lower for the week.
- On the sector front, health care (XLV ) surged 1.74% on upbeat earnings from the likes of UnitedHealth Group Inc (UNH).
- Financials (XLF ) continued to flex their muscles, rising 1.31%. The sector has now returned more than 5% over the past month. To explore the world of financial ETFs, click here.
- On the opposite side of the ledger, telecommunications, (XTL ), energy (XLE ) and consumer staples (XLP ) were the biggest laggards, falling at least 1% apiece.
- Most of Wall Street’s major sectors finished lower this week, possibly signaling a slowdown in the equities rally.
Foreign Equity Review
- With the exception of Japanese stocks (EWJ ), which went up by a mere 0.19%, global equity markets headed for declines this week. Brazilian equities (EWZ ) suffered the biggest decline, falling nearly 2%.
- Emerging markets including China (FXI ) to Russia (RSX ) also finished in negative territories during the week.
- The iShares MSCI United Kingdom ETF (EWU ) shed 1.33% for the week after Bank of England (BOE) Governor Mark Carney issued a stern warning on Brexit risks. Although Brexit may not happen, the following article provides a breakdown of the best ETF plays during the divorce procedure.
- To explore ETFs based on country exposure, refer to our ETF Country Exposure tool. Select a country from a world map and get a list of all ETFs tracking your pick.
- Precious metals headed for sharp declines this week as the U.S. dollar rose against a basket of world currencies. The SPDR Gold Trust ETF (GLD ) declined roughly 1% over the past five trading sessions. The iShares Silver Trust (SLV ) also finished lower. Use our Head-to-Head Comparison tool to compare these two ETFs on a variety of criteria such as performance, AUM, trading volume and expenses.
- The United States Natural Gas Fund (UNG ) also suffered a broad retreat, extending its monthly decline to 8.49%.
- Meanwhile, the iPath Bloomberg Copper Subindex (JJC ) climbed 1.26% as copper prices touched three-and-a-half year highs. JJC has returned more than 25% year-to-date and is up more than 52% over the past year.
- The greenback pared gains in the latter half of the week, but that didn’t stop the dollar bulls (UUP ) from driving prices higher. UUP added 0.46% between Friday and Thursday, extending its monthly return to 1.55%.
- As the dollar rose, all other major currencies fell. The British pound (FXB ) suffered the biggest retreat as Carney stressed Brexit risks. The currency has also posted the biggest monthly retreat, falling 2.71%.
- The Japanese yen was also among the biggest decliners. The Guggenheim CurrencyShares Japanese Yen Trust (FXY ) fell 0.70% over the five-day period.
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Disclosure: No positions at time of writing.