Monday, February 5, 2018

Market Reaction

Monday, February 5, 2018 – Congratulations to the Philadelphia Eagles for bringing home their first Lombardi Trophy! They certainly performed better than the equity markets this past week with the first weekly drop in major U.S. stock indexes of 2018. The Dow Jones Industrial average dropped 4.1%, the S&P 500 index dropped 3.9% and NASDAQ dropped 3.5%.  All eyes are on the markets' reaction today after Friday's big sell off. Initial indicators point to continued selling on the opening this morning and we'll have to see if it persists throughout the day.

Perhaps driven by newfound concerns over future interest rate increases, last week every sector had a negative return, unlike the previous week where every sector was in the green. The worst performing sectors were Energy, Materials and Healthcare which was down 6.52%, 5.66%, and 5.02% respectively. Energy stocks’ loss was due to the lower-than-expected earnings results from leaders Chevron and ExxonMobil. Healthcare shares dropped after news that Amazon, Berkshire Hathaway and JPMorgan were planning to establish a healthcare provider for their US employees - a new threat that may cut the profits of current healthcare providers.

ETFG Equity Exposure Report - In the ETF Global exposure report, we can see what ETFs have the biggest exposure to Chevron. There is 17.66 Billion of Chevron stock that is held in all ETFs. ERGF, iShares Edge MSCI Multifactor Energy ETF, XLE, Energy Select Sector SPDR Fund, and VDE, Vanguard Energy ETF, have the biggest concentration in Chevron. They hold 17.94%, 16.48% and 14.9% respectively.

ETFG Quant Movers - This week, in the ETF Global Quant Movers, EZA, iShares MSCI South Africa ETF had the largest score increase of 29.35%, PXH, Powershares FTSE RAFI Emerging Markets Portfolio, increased by 23.69% and EWI, iShares MSCI Italy Capped ETF, increased by 22.98%. On the flip side, PEY, Powershares High Yield Equity Dividend Achievers Portfolio, lost 20.53% DTN, WisdomTree Dividend Ex-Financials Fund, lost 15.53% and SILJ, ETFMG Prime Junior Silver ETF, lost 15.04%.

ETFG Weekly Select List - In the ETF Global Select List this week the biggest gainers in their respective categories were IXP, iShares Global Telecom ETF, which went from 4th to first this week in the  Telecommunications  category and SPDW, SPDR Portfolio World ex-US ETF, which also moved from 4th to first this week in the Global Ex-U.S category.

It could be an eventful week in the markets after Friday’s plunge.  Please consult our Quant Model for daily updates to Ratings and Rankings.

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