Monday, August 14, 2017

Fire, Fury & the VIX

Monday, August 14, 2017 - The global markets were met with Fire and Fury this week as political tensions between the US and North Korea continued to escalate. Major indexes closed mostly down for the week as corporate earnings and employment reports took a back seat in the news due to the rhetoric that North Korean Dictator Kim Jong Un and President Donald Trump have been spewing back and forth to one another.

The Dow Jones and Nasdaq finished off about 100 points each and the S&P 500 about 30 even after they pared their low points of the week with a day in the green on Friday. The political fears were not only seen by overall market prices dropping but also in the VIX index, which is used as Wall Street’s fear gauge by many. It surged over 62% this week alone and hit levels that were last seen in November during the presidential election.

Some ETFs felt obvious pressure from the growing tensions around nuclear warfare. The Deutsche x-trackers MSCI South Korea Hedged Equity Fund (DBKO) and the iShares MSCI South Korea Capped ETF (EWY) both finished lower this week due to the uncertainty as South Korea shares a peninsula with ground zero if there was any military action to take place.

Elsewhere in the ETF world, our Quant movers saw some undervalued funds in the healthcare and Biotechnology space. VanEck Vectors Biotech ETF (BBH), First Trust NYSE Arca Biotechnology Index Fund (FBT) and the Fidelity MSCI Health Care Index ETF (FHLC) all made the top 10 in gains to their overall reward score moving up 7.83, 5,32 and 4.83 respectively.

On the loser’s side, we saw scores drop in small-cap and dividend funds as our model has seen some less favorable characteristics of those funds. ETFs like the Vanguard Small-Cap ETF (VB)WisdomTree Europe Hedged Small Cap Equity Fund (EUSC), WisdomTree Europe Dividend Growth Fund (EUDG) and the FlexShares International Quality Dividend Defensive Index Fund (IQDE) lost 8.40, 8.15, 7.78 and 7.56 to their overall scores respectively.

We will see how the markets will continue to react to the geo-political tensions and now some new ones domestically here in the United States with major protests in Virginia breaking out over the weekend. One thing is for sure, there is only so much straw that you can place on the camel’s back before you break it. When will the finally straw finally fall?

Thank you for reading ETF Global Perspectives!

ETFG 21 Day Free Trial:

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.