Monday, December 11, 2017

Brisk December Buying

Monday, December 11, 2017 - As December rolled in, it seemed as though investors were pulling their yearly gains out of the market in order to purchase some holiday gifts but that quickly changed course as we finished the week up yet again in US markets. The S&P 500 and Dow Jones Industrial Average both finished the week off at record highs closing at 2,651.50 and 24,329.16 respectively. The Nasdaq finished slightly down at 6,840.08 closing down just .1% for the week.

Even bitcoin experienced some holiday cheer as it climbed up above 17,000 last week before moving down and then back up again in what has seemingly been the only volatile asset for people to invest in this year. As of Sunday morning, it was sitting at roughly $15,300 and is looking like it may be getting closer and closer to being investable in the form of an ETF as futures are starting to launch on the asset class this week.

In ETFs, the gains continue to roll on but in the form of inflows. Globally, ETPs have witnessed over $600B worth of inflows this year which continue to blow past any records set in previous years. In the US, which controls roughly 3/4 of the AUM globally and was responsible for $424b worth of $600b, we saw over $30b has flowed into equity ETPs since just November 29th.

An interesting fact about the inflows in the US is that Charles Schwab has more products with flows of over $1b than State Street YTD showing that the low fee structure put into place by the discount broker may be paying off.

In our ETFG Quant Movers, which ranks all US listed equity products, the Powershares India Portfolio (PIN) saw the biggest gain in its overall score followed but VanEck Vectors Steel Index Fund (SLX) and the SPDR S&P Capital Markets ETF (KCE). They had gains to their score of 8.10, 8.04 and 7.76 to their overall scores respectively.

On the loser’s side of the Quant model, we saw scores go down in growth ETFs. WBI SMID Tactical Growth Shares (WBIA) and iShares S&P 500 Growth ETF (IVW) saw the greatest declines in their scores losing 9.16 and 7.63 to their rewards respectively.

We will see how the markets and ETPs continue to perform before the year end but it seems as though they both have nothing in their way to continue their rise upwards. A tax plan looks as though it will continue to make progress throughout the house and senate, and same goes for deciding on next year’s budget as they have agreed to extended the deadline until December 22nd to come up with the numbers. On top of that, the economy added over 220,000 jobs in November which kept the unemployment rate at 4.1%.

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