Monday, March 20, 2017

Slow and Steady Raises

Monday, March 20, 2017 - Historically, March Madness brings positive stock gains - the Dow Jones Industrial Average rose 9 out of the last 11 years with an average return of 2.1% and the S&P 500 rose 10 of the last 11 tournaments with an average gain of 2.2% - this trend continues thus far this tournament, after posting the first loss in 6 weeks, the S&P 500, NASDAQ and Dow Jones all rebounded slightly this past week as the Dow rose by .1%, the S&P 500 increased by .2%, and NASDAQ increased by .7%.

With trading volume down 15% from average, the biggest news of the week came on Wednesday when the Federal Open Market Committee raised short term interest rates by .25%, from .75% to 1%. This was the first time they raised them this year, but the second time in 3 months. U.S. and Global stocks rallied after Chairman Janet Yellen expressed confidence in the U.S. economy.

Most sectors performed fairly well as 6 of 10 managed to show gains this week with the largest coming from Real Estate, Utilities and technology, which posted increases of 1.24% .53% and .43% respectively.On the flip side, Health Care and Financials lost 1.08% and 1.37%.

On the M&A front, Intel announced their acquisition of Mobileye (MBLY) for $15 billion in cash, roughly 30% over the current trading price crating some large beneficiaries through their respective ETF ownership of Mobileye.  Reviewing our ETF Global Equity Exposure report, we see the 3 biggest holders of (MBLY) are ITEQ, Bluestar TA-BIGTECH Israel Technology ETF, EIS, Ishares MSCI Israel Capped ETF and ISRA, VanEck Vectors Israel ETF, which hold 14%, 8%, and 6.5% respectively.  It is no surprise that each of these ETFs had great returns this week, 4.61%, 2.66% and 2.16% respectively.

ETFG Quant Movers: The biggest gainers in our Quant Model this week were NGE, Global X MSCI Nigeria ETF, which gained 17.7%, QDEU, SPDR MSCI Germany Quality Mix ETF, which gained 11.62% and DDBI, Legg Mason Developed EX-US Diversified Core ETF 10.98%. All these funds are Non US broad equities. The Biggest Losers in our Quant Model this week were IWV, IShares Russell 3000 ETF, which lost 18.59%, IYF, IShares US Financials which lost 18.57%, and DXJ, WisdomTree Japan Hedged Equity Fund which lost 17.99%.

ETFG Select List: Similar to last week, this week we had another abundant amount of Funds making it to the top spot in the respective categories. HACK, PureFunds ISE Cyber Security ETF, in the Technology category, IDU, iShares US Utilities ETF, in the utilities category, NGE, Global X MSCI Nigeria ETF in the Middle East & Africa category, and HDAW, Deutsche X-trackers MSCI All World ex US High Dividend Yield Hedged Equity ETF, in the High Dividend Yield category.

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