US Financials have posted stronger than
expected results due to a robust lending environment, tight expense controls
and aggressive share buybacks. Credit conditions remain sound, putting to rest
any concerns that the US consumer is showing signs of fatigue. While the
consumer appears healthy, earnings weakness from US railroads highlight some of
the challenges that the US industrial sector is facing. CSX lowered full year
guidance this week due to macroeconomic and trade uncertainty, sending the
stock down 10% on the day. The disparity in earnings reflects the bifurcation
that the US economy is experiencing since the trade dispute began last year. Adding
to the noise, the continued shutdown of Boeing’s 737 fleet has also damaged
trade – airlines are a significant manufacturing segment with ripples through a
variety of industrial areas.
Recent trade policies have slowed several
cylinders of the US economic engine, leading to declining economic forecasts
for the full year despite a healthy consumer. The market appears to be
optimistic that US and China trade relations will improve in the coming months
healing the US industrial sector and business confidence. Until then, we expect
a choppy environment for the foreseeable future with heightened earnings
volatility. Our view is that the US consumer will finish strong after a noisy
start to the year, but ultimately the industrial sector needs to fire up again
for this economy to get back to a growth rate that soothes investors and
extends the cycle.
ETFG Quant Movers
The top 3 Quant Gainers of this week are
IQ Chaikin US Large Cap ETF (CLRG), Sprott Gold Miners ETF (SGDM), and Vanguard FTSE All-World ex-US ETF (VEU). The top rated 3 Quant Losers of the week are IQ
50 Percent Hedged FTSE Europe ETF (HFXE), Global X MSCI Greece ETF (GREK), and JPMorgan Long/Short ETF (JPLS).
ETFG Weekly Select List
The ETFG Select list shows our top-rated ETF by each sector. Global X Gold
Explorers ETF (GOEX)
is our top rated Basic Material. Invesco Dynamic Retail ETF (PMR) is our top rated Consumer Discretionary. Our top rated Consumer Staples ETF is iShares Global
Consumer Staples ETF (KXI). Our top rated Energy ETF is VanEck Vectors Oil
Service ETF (OIH).
To
learn more about our ETFG Select List, please visit us at https://www.etfg.com/etfg-select-list
or call us at (212) 223-ETFG (3834).
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for reading ETF Global Perspectives!
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