Tuesday, January 22, 2019

Strong Earnings for Financials

Tuesday, January 22, 2019 - Stocks recorded their fourth consecutive week of positive returns and built on their strong start to 2019. The gains pulled the Large-Cap benchmarks out of correction territory, or within 10% of their recent highs, but the Nasdaq Composite Index and the smaller-cap benchmarks remained below that threshold. Within the S&P 500 Index, Financials led the gains, helped by better-than-expected earnings reports from some large banks. The focus shifted to corporate earnings, with several high-profile banks reporting quarterly earnings. Altogether, earnings were better than expected, and more importantly, commentary from management teams about the outlook was positive. As a result, the Financial Services sector outperformed the broader market, finishing 6% higher. Trading volumes were somewhat muted, especially early in the week and volatility, as measured by the Cboe Volatility Index (VIX), continued its recent downward trend. The S&P 500 has now quickly recovered more than half of its losses since September's peak and finished the week up 74.45 points, the DJIA was up 710.40 points and the NASDAQ Composite rose 185.75 points.

ETFG Quant Movers – those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings:

ETFG Quant Winners: This week’s biggest winner was Principal Price Setters Index ETF (PSET) gaining 8.86 points to end with a Quant score of 58.26 Principal Active Global Dividend Income ETF (GDVD) gained 8.51 points moving its score to 60.34. O'Shares FTSE Russell Small Cap Quality Dividend ETF (OUSM) posted a solid gain for the week, up 8.28 points to 52.70. Rounding out the top five were iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) and iShares Russell Mid-Cap Growth ETF (IWP) gaining 8.21 and 8.12 points respectively.

ETFG Quant Losers: This week’s biggest loser was ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB) dropping 8.89 points to a Quant score of 43.92. Gabelli Media Mogul NextShares (MOGLC) was down 8.78 to 42.26, iShares U.S. Oil Equipment & Services ETF (IEZ) fell 8.05 to 52.20. Rounding out the bottom five were Ivy Focused Value NextShares (IVFVC) and SPDR S&P Health Care Services ETF (XHS) down 7.33 and 7.12 points respectively.

ETFG Weekly Select List - the five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.

Because of the sector’s success on the 1W Quant Rating of the  ETFG Heat Map, we’d like to highlight some substantial movement in the Financials Sector when comparing this week’s Select List to last. SPDR S&P Insurance ETF (KIE) remained in the top spot from last week to this week while VanEck Vectors BDC Income ETF (BIZD) made the biggest jump from fifth last week to the number two spot this week. Both iShares MSCI Europe Financials ETF (EUFN) and iShares Global Financials ETF (IXG) remained in their third and fourth spots from last week’s Select list, showcasing consistent popularity in the funds in the new year. Finally, SPDR S&P Regional Banking ETF (KRE) broke onto the list in the fifth spot after not being ranked last week. Overall, through both investments and strong earnings reporting from the major players in the sector, these Financials ETFs have been a hot ticket to start 2019.

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