Monday, March 25, 2019

A Week's Slide

Monday March 25, 2019 - Stocks closed lower for the week after a sell-off on Friday took the broad S&P 500 Index down from five-month high reached the previous day. A plunge in longer-term interest rates seemed to be the primary market driver and took a heavy toll on financial shares by threatening lower bank lending margins. Conversely, the prospect of lower rates helped the small real estate sector, which performed best within the struggling S&P 500 Index. Technology and other growth-oriented shares also continued to outperform value stocks, which are typically more sensitive to economic conditions.

Disappointing European manufacturing data in combination with a more "dovish" Fed led the 10-year treasury yield to fall the most in two years and U.S. investment grade bonds to rise the most in four years. The Federal Reserve left interest rates unchanged, while signaling no rate hikes for the balance of 2019, acknowledging global uncertainty and muted inflation pressures. Markets responded favorably at first, with both bonds and equities rallying on the news, but the markets gave back these gains as the focus turned to what the Fed’s pause might mean about the underlying health of the economy. The Fed will likely continue to be a key driver of equity markets as officials negotiate the balance between rates, inflation and a healthy but slower-growing economy. Summing up, the S&P 500 finished the week down 21.77 points, DJIA was down 346.55 points and the NASDAQ Composite dropped 45.86 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 Vanguard Consumer Discretionary ETF (VCR) gaining 9.33 points to finish the week with an ETFG Quant score of 42.92. ARK Web x.0 ETF (ARKW) posted a steady gain of 8.51 points this week to finish at 59.64. Vanguard Mid-Cap Value ETF (VOE) rose 8.25 points to end the week at 43.06. Vanguard Russell 2000 (VTWO) was up 8.10 finishing with a Quant score of 44.47 on the week. Finally, JPMorgan Alerian MLP Index ETN (AMJ) posted a solid gain of 8.05 to end the week at 58.41.

ETFG Quant Losers: This week’s biggest loser was iShares MSCI EAFE Small-Cap ETF (SCZ) which dropped 7.13 points to bring its ETFG Quant score down to 43.13. Gabelli Food of All Nations NextShares (FOANC) down 6.91 points to finish the week at 48.63. Fidelity MSCI Financials Index ETF (FNCL) fell 6.30 points ending the week at 43.68. SPDR S&P Capital Markets ETF (KCE) was down 6.13 points to a Quant score of 42.99. Rounding out the bottom five Invesco S&P International Developed Momentum ETF (IDMO) ended the week at 54.03, 5.60 points lower than last week’s finish.

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 sectors success on the 1W Quant Rating of the ETFG Heat Map, we’d like to highlight some substantial movement in the Technology Sector when comparing this week’s ETFG Select List to last. First Trust Nasdaq Semiconductor ETF (FTXL) and Global X FinTech Thematic ETF (FINX) retained the top two spots from last week to this week showcasing their consistent popularity over the month of March. iShares Exponential Technologies ETF (XT) made the biggest jump, up from fifth to third, this week. Rounding out the top five are ETFMG Video Game Tech ETF (GAMR) which moved up one to the four spot this week and newcomer SPDR S&P Technology Hardware ETF (XTH). Overall, through both investments and strong earnings reporting from the major players in the sector, these Technology ETFs have been a hot ticket in 2019.

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