In
general, the U.S. markets edged slightly higher last week, driven by several
key factors. Trade negotiations with China prompted swings between optimism and
pessimism, while ongoing diplomatic tensions with North Korea weighed heavily on
the market's mood. The Fed’s decision on interest rates was also in focus,
signaling that the path of gradually rising rates remains intact. Of particular
note are the prospects of inflation temporarily running slightly above their
long-term 2% target, providing some comfort to investors. Meanwhile, corporate
earnings are rising at a strong pace. While prevalent risks are likely to drive
further volatility, the combination of a healthy consumer and healthier bottom
lines for businesses provide support for the market.
The
week was perhaps most notable for the nosedive in oil prices and energy shares.
On Monday, oil prices reached their highest level since late 2014 - mostly due
to the speculation that the U.S. would impose new sanctions on Venezuela after
the country’s leadership congealed its control in allegedly corrupt elections.
Ironically, the threat of U.S. sanctions appeared to be partly at work in this
case as well, with some speculating that OPEC was seeking to compensate for the
loss of Iranian and Venezuelan supply.
These
key market highlights were reflected our ETF Global dynamic and prospective
Quant Rankings. The week’s winners include both iShares U.S. Energy ETF (IYE) and iShares Global Energy ETF (IXC) both gaining approximately 15% in their respective
total Quant Score. The biggest drop in ETFG
Quant ratings were SPDR Portfolio Emerging Markets (SPEM) and iShares Currency Hedged MSCI South Korea ETF (HEWY). Looking ahead, economic data in the coming week
will be plentiful, with May's jobs report and construction spending all being
reported on Friday. For those investors looking for a real winner for their
portfolio, with a total Quant Score of 82.42 the WisdomTree U.S. MidCap
Dividend Fund (DON) is expected have the most
potential in capturing positive market movements.
Thanks
for reading ETF Global Perspectives!
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