Monday, May 7, 2018

Vol + Earnings

Monday, May 7, 2018 - There was a time not so long ago that volatility almost felt non-existent in the stock markets. Prices of securities kept rising and there wasn’t a clear picture on when that would change. Fast forward to our current state of the markets, we haven’t seen lasting declines but volatility has certainly returned.

Take the Dow Jones industrial Average that started the week off at 24,484. We saw declines by mid-week of over 900 points only to round out on Friday a measly 200 or so points down. The Nasdaq Composite also saw its own swings for the five day trading period but was the big winner of all the indices this week as the tech tracking index finished up about 56 points capping Friday off over the 7200 mark.

With the market trending mostly upwards from the start of the month, we saw inflows into some of the biggest index funds out there. SPY, the largest ETF on the market, saw almost $6B worth of inflows MTD according to our ETFG Fund Flow Summary. This was joined by the iShares Core MSCI EAFE ETF, IEFA, and the iShares Core U.S. Aggregate Bond ETF, AGG, which saw $1.50B and $1.06B in inflows respectively MTD.

In our ETFG Quant Movers, we saw gains to equity-based ETF tracking a multitude of Sectors and Geographic Regions. The top three were the iShares Global 100 ETF, IOO, the iShares Global Healthcare ETF, IXJ and the Deutsche Xtrackers Germany Equity ETF, GRMY. They gained 20.61, 13.26 and 10.86 this week to their respective scores.

On the Quant losers side, we saw many of the declines come from emerging market ETFs. The Hartford Multifactor Emerging Markets ETF, ROAM, the WisdomTree Emerging Markets Consumer Growth Fund, EMCG and the iShares MSCI Singapore Capped ETF, EWS all had the worst moves to their scores. They lost 9.56, 9.07 and 9.04 to their overall ETFG reward score respectively.

With earnings reports just about wrapping up for the first quarter of 2018, we will see if and what other factors can play a role to continuing volatile swings in the market. Some of those factors can be the anticipation  of the historic meeting coming between President Donald Trump and North Korea’s Kim Jong-Un in the next few weeks, there is still worry over trade wars and the Russia-Syrian situation in the middle east is still far from over.

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