Monday, June 18, 2018

Headlines Near and Far

Monday, June 18, 2018 – Last week was headlined by Trump’s meeting with Kim Jung Un at the Singapore Summit as the world seemed to have some relief that there is now a dialogue between North Korea and the U.S. The summit however, seemed to have little impact on the markets. On Tuesday, however, the Labor Department reported that inflation in May had reached 2.8% on a year-over-year basis and on Wednesday, the Fed raised the Fed Funds rate by 25 basis points which combined provided the primary cause of stocks dropping following the second interest rate hike in 2018. Investors had an even bigger reaction to trade news on Friday as the Trump administration announced that it was following through with the imposed tariffs on imports of $50 billion worth of goods from China. Overall for the week, the Dow Jones dropped .9%, the S&P ended flat and NASDAQ increased by 1.3%.

AT&T Broadband announced that it will merge with Comcast Corporation in a $72 Billion Transaction. The new company, AT&T Comcast Corporation, will be one of the leading communications, media and entertainment companies in the world. AT&T shareholders will receive approximately 0.34 shares of AT&T Comcast Corporation for each share of AT&T they own, while Comcast shareholders will receive one share of AT&T Comcast Corporation for each Comcast share they own. With the ETFG exposure report we can see which funds have the biggest exposure to Comcast and ATT and how they will be affected. The biggest ETF holders of ATT (T) are FCOM, Fidelity MSCI Telecommunication Services Index ETF, which has 21.76% exposure, VOX, Vanguard Communication Services ETF, which holds 20.83%, and IXP, iShares Global Telecom ETF, which holds 17.6%. The biggest holders of Comcast (CMCSA) are IEME, iShares evolved U.S media and Entertainment ETF, which holds 5.19%, XLY, Consumer Discretionary Select Sector SPDR Fund, which holds 4.98%, and IYC, iShares US Consumer Services ETF which holds 4.37%.

In the ETFG Quant Mover section we had MDYG, SPDR S&P 400 Midcap Growth ETF, gain 46% in their quant score, SLYV, SPDR S&P 600 Small Cap Value ETF which had a 40% increase in their score and SLY, SPDR S&P 600 Small Cap ETF, which had a 39% increase in their score.

On the flip side, ARGT, Global X MSCI Argentina ETF, dropped 22% of their ETTFG Quant score, DEMG, X-Trackers FTSE Emerging Comprehensive Factor ETF, dropped 17.55%, and CN, X-trackers Harvest MSCI All China Equity ETF, dropped 15.89%.

In the ETFG Select list, we had 3 new funds that were unranked last week claim the top in their respective categories. CNSF, iShares Edge MSCI Multifactor Consumer Staples ETF, in the Consumer Staples category, TUR, iShares MSCI Turkey ETF, in the Europe category and RDIV, Oppenheimer Ultra Dividend Revenue ETF, in the High Dividend Yield category.

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