More than 40% of S&P 500 companies have now released their
earnings reports and most of the results this week continued to come in better than expected. Alphabet (GOOG) exceeded expectations, and shares climbed more than 10% the
following day. Investors were less pleased, however, with tepid revenue
guidance from Facebook (FB) and a profit miss from Amazon (AMZN).
The S&P 500 communication services sector (+4.6%), which is
home to Alphabet, was this week's outright leader. The financials (+2.7%) and
information technology (+2.4%) sectors followed suit, while the energy (-0.6%)
and utilities (-0.6%) sectors finished lower. The Philadelphia Semiconductor
Index remained on a tear, rising 4.6% this week on positive commentary out of
Goldman Sachs, upbeat earnings results from Texas Instruments (TXN),
and news that the U.S. will head to China next week to continue trade talks.
For the year, the PHLX is now up 38.0%.
On the data front, the advance estimate for second-quarter GDP
increased at a seasonally adjusted annual rate of 2.1% (Briefing.com consensus
1.8%). Although the U.S. economy did slow down from the 3.1% growth recorded in
the first quarter, strong consumer spending helped the economy grow better than
expected. The upbeat data is likely to feed into Boston Fed President
Rosengren's (FOMC voter) view that the Fed should keep rates unchanged at its
policy meeting next week. Mr. Rosengren's stance is a minority position in the
market's mind, though, especially at a time when central banks around the
world, including the European Central Bank, have called for easier monetary
policy.
U.S. Treasuries ended the week little changed, leaving yields at
relatively low levels that continued to favor risk assets. The 2-yr yield
increased three basis points to 1.87%, and the 10-yr yield remained unchanged
at 2.08%. The U.S. Dollar Index advanced 0.9% to 98.01. WTI crude advanced 1.0%
to $56.19/bbl.
The top 3 ETFG Quant Gainers of
this week are Principal Contrarian Value Index ETF (PVAL), First Trust Hedged
BuyWrite Income ETF
(FTLB), and Global X FinTech Thematic ETF (FINX). The top rated 3 Quant Losers of
the week are Vanguard FTSE All-World ex-US ETF (VEU), IQ 50 Percent
Hedged FTSE Europe ETF (HFXE), and WisdomTree Europe Quality Dividend Growth Fund (EUDG).
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).
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