Sectors Jockey

Tuesday, March 13, 2018 – Friday marked the ninth anniversary of the current bull market, the second-longest in history. On the other hand, a month has now passed since the S&P 500 experienced a correction, falling 10.2% from highs reached on January 26. While stocks have rebounded by more than 7% since the lows experienced a month ago bringing all of the major indexes back into positive territory for the year to date, it has certainly been a bumpy ride.

Gains might have been even stronger if not for the week’s major headwind, concerns that new tariffs on steel and aluminum imports might lead to a broader trade war. Not to mention Chief Economic Advisor Gary Cohn announced his resignation early last week. Market watchers saw Cohn's departure as a bad omen for the White House's economic policy. However, stocks maintained the course Thursday afternoon following President Trump's proclamation that steel and aluminum tariffs would exclude imports from Canada and Mexico. Markets continued rising on Friday following February's Jobs report that showed strong gains, adding 313,000 jobs, much higher than the 205,000 expected. The Employment in Construction category rose by 61,000 in February, a key indicator in determining the health of our economy.

The technology-heavy Nasdaq Composite Index fared best and managed to set a new intraday high on Friday. The Small Cap Russell 2000 Index also performed especially well.  Along with Information Technology shares, Financials, Industrials, Business Services and Materials led the S&P 500 Index’s gains, while Utilities lagged. Following last week's rally, the S&P 500 had gained 3.5%. Economically-sensitive groups like Financials (+4.4%), Technology (+4.3%), Industrials (+4.4%) and Materials (+4.1%) were the top-performing sectors, while sectors like Consumer Staples (+1.7%), Utilities (+0.8%), and Telecom Services (+1.8%) showed relative weakness. It seems only natural that top performer ETFs  included iShares Edge MSCI Multifactor Technology ETF (TCHF), John Hancock Multifactor Industrials ETF (JHMI) and Fidelity MSCI Materials Index ETF (FMAT) up 4.7%, 4.78% and 3.62% for the week respectively.

As you would imagine, the ETF Global Quant Movers reflected these trends. Top gainers included WBI SMID Tactical Value Shares (WBIB), AlphaMark Actively Managed Small Cap ETF (SMCP) and IQ 50 Percent Hedged FTSE Europe ETF (HFXE) gaining an astounding 35.07%, 27.25%, and 23.69% respectively in their ETFG Quant Ratings. Losers for the week included SPDR S&P Semiconductor ETF (XSD), iShares U.S. Healthcare Providers ETF (IHF) and PowerShares NASDAQ Internet Portfolio (PNQI). These funds saw a percentage loss of 19.35%, 19.14%, and 16.45% respectively in their Quant Ratings.

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