Monday, June 25, 2018

Trade Tariff Tensions Continue

Monday, June 25, 2018 – As summer officially arrived last week, major indices fell and were driven in particular on continuing themes. The S&P 500 dropped .9%, the Dow Jones Industrial Average was down 2% and NASDAQ fell by .7%. Energy and Industrials were the worst performing sectors dropping 3.39% and 4.07% respectively, while Real Estate and Utilities were the only 2 sectors that had a positive week, gaining 2.46% and 2.5%.

Tensions continue to rise between the U.S and China. China announced its consideration of creating tariffs on U.S. exports, with  the Trump administration countering with an announcement of higher tariffs on an additional $200 billion in Chinese imports clearly worrying investors of potential inflation and the hindering of economic growth.

The rebalancing of one of the most widely followed indexes, the FTSE Russell drove record 1.2 million shares worth over $39 billion to be traded in less than a second on Friday during Nasdaq’s close. It was announced that General Electric would no longer be part of the index being replaced by Walgreens Boots Alliance (WBA). After the announcement Walgreens gained 5.2%. In the ETFG Equity Exposure Report, we can see which funds have the greatest exposure to WBA. RTH, Vaneck Vectors retail ETF, has  4.69% weight of WBA, XLP, Consumer Staples Select Sector SPDR Fund, which holds 3.94% of WBA, and PKW, Invesco BuyBack Achievers ETF, which has  3.87% of WBA.

This week, in the ETFG Quant Movers, the biggest gainers were SCHA, Schwab US Small CAP ETF, which gained 26.34% in their ETFG Quant score, REMX, Van Eck Vectors Rare/Earth Strategic Metals ETF, which gained 19.78%, and IQDE Flexshares International Quality Dividend Index Fund, which  gained 18.76%. On the flip side, VTV, Vanguard Value ETF, ETFG Quant score decreased by 18.47%. VCR, Vanguard Consumer Discretionary ETF decreased by 18.08%, and HFXE, IQ 50 percent hedged FTSE Europe ETF, decreased by 18.07%.

In the ETFG Select List, we had FDVV, Fidelity Core Dividend ETF, go from being unranked last week to be the number 1 scored fund in the High Dividend Yield category. XLP, Consumer Staples Select Sector SPDR Fund, went from being number 5 rated last week to number 1 this week in the Consumer Staples  category. UTLF iShares Edge MSCI Multifactor Utilities ETF, went from being 4 last week to 1 this week in the Utilities category.

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