A Rate Cut Looms...

Monday, July 15, 2019 - Expectations for monetary easing around the world continued to drive stocks higher this week. The Dow Jones Industrial Average rallied to a record high, closing above 27,000 for the first time, following the Fed chairman's testimony to Congress. Powell conveyed that the case for more a accommodating policy had strengthened, further solidifying expectations for a rate cut in the coming months.

The European Central Bank (ECB) is also considering injecting fresh stimulus to the economy through interest-rate cuts, or the relaunch of quantitative easing. As the second-quarter earnings season kicks off next week and attention shifts from central banks to earnings, we think volatility will likely pick up. With domestic large-cap stocks near all-time highs, its always a good time to review to review and potentially rebalance portfolios that have strayed far from the initial target asset allocation.

The ETFG Select list shows our top-rated ETF by each sector. Sprott Junior Gold Miners ETF (SGDJ) is our top rated Basic Material. SPDR S&P Retail ETF (XRT) is our top rated Consumer Discretionary. PowerShares S&P SmallCap Consumer Staples Portfolio (PSCC) is our top rated Consumer Staples. Our top rated Energy ETF is iShares Edge MSCI Multifactor Energy ETF (ERGF).

The top 3 Quant Gainers of this week are IQ Chaikin US Large Cap ETF (CLRG), SPDR Russell 1000 Yield Focus ETF (ONEY), and First Trust Index Innovative Transaction & Process ETF (LEGR). The top 3 Quant Losers of the week are Invesco FTSE RAFI Developed Markets ex-U.S. Small-Mid ETF (PDN), Global X MSCI China Communication Services ETF (CHIC), and Global X MSCI Greece ETF (GREK).

To learn more about our ETFG Quant Gainers and Losers, please visit us at https://www.etfg.com/research/quant-movers or call us at (212) 223-ETFG (3834).

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