Monday, November 21, 2016

How Much, How Often

Monday, November 21, 2016 - In its 2nd consecutive, positive week since the election, stocks, reacting to Trump winning the election, caused most of the major benchmarks to reach all-time highs. The S&P 500, Dow Jones, and NASDAQ all had positive gains - the S&P gained .8%, the Dow Jones Industrial increased .1%., and NASDAQ increased by 1.6%.  However, with the election now in the rear view mirror, more attention turns towards the growth of the economy and the potential and timing of increases in interest rates. On Thursday, Janet Yellen spoke before Congress, indicating that due to the recent economic signals, the Fed will raise interest rates in their December 13 meeting. So begins the inevitable interest rate hike debate for 2017 of “How much, How Often.”

From a sector perspective last week, most equity sectors finished in the green as the rising tide lifted many boats. Energy, Financials Consumer Discretionary, Technology, and Utilities round up the top 5 sector performance for the week with a respective return of 2.4%, 2.26% 1.86%, 1.35%, and .56%. The only 2 negative sectors were Healthcare with -1.12% return, and consumer staples -.08% return.

As earnings season continued, many firms reported last week, especially from the retail sector. 1 company in particular that surpassed their estimates was Best Buy (BBY). We can take look at the ETF Global ETF Exposure Report to see what ETFs have the most exposure to BBY, and how did they perform this week. The top 2 ETFs based on % exposure to BBY are FTXD, First Trust NASDAQ Retail ETF, and QVAL, ValueShares U.S Quantitative Value ETF, which hold 8.21% and 3.22% respectively. FTXD had a roughly 2% return for the week, while QVAL managed so break even.

In the ETFG weekly Quant Movers, USSD, Wisdom Tree Strong Dollar US equity fund, leads the way with the biggest gain of 13.9%. EEH, Elements spectrum ETN, and ROUS, Lattice US Equity Strategy ETF, were in second and third with a 10.23% and 8.85% gain respectively.  On the other side we have AMJ, JP Morgan Alerian MLP Index ETN, BWV, Ipath CBOE S&P 500 Buy Write Index ETN, and CAPE, Barclays ETN + Shiller Capetm ETN, down 18.58%, 16.19% and 15.74 respectively.

Our Weekly Select List was stable with over 75% of categories maintaining their top 5 leaders. One fund that stood out and made a leap from ranked 4th to first from last week to this week was DEM, WisdomTree Emerging Markets Equity Index Fund, in our High dividend yield category.

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