A Market Breather Before Thanksgiving?

Monday, November 25, 2019 - Stocks snapped their multi-week winning streak as conflicting signals on the advancement of U.S.-China trade negotiations weighed on market sentiment. Trade tensions continue to wield an outsized influence on capital markets with unevenness on the trade front drowning out some positive news on domestic manufacturing activity and consumer sentiment. Monthly gains in the U.S. PMI and University of Michigan Consumer Sentiment Index along with a moderating pace of declines in Eurozone and Japanese manufacturing and services sectors provided reason for optimism. Yet this upbeat news was derailed by the nearly unanimous passage of the Hong Kong Human Rights and Democracy Act in both chambers of Congress and reports that the U.S. and China have remained unable to bridge the gap on key issues standing in the way of a phase one pact.

With the prospect of a resolution to the trade war growing bleaker, U.S. stocks failed to register a seventh consecutive week of gains. Following this week's trading activity, the DJIA, S&P 500, and Nasdaq declined 0.5%, 0.3%, and 0.2% respectively.

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

ETFG Quant Winners: The ETFs experiencing the largest advances in their ETFG Quant Scores this week were the iShares Currency Hedged MSCI United Kingdom ETF (HEWU), Reality Shares DIVCON Dividend Defender ETF (DFND), Principal Millennials Index ETF (GENY), ProShares Decline of the Retail Store ETF (EMTY), and Arrow Dogs of the World ETF (DOGS).

ETFG Quant Losers: Conversely, the ETFs suffering the biggest drops in their Quant scores this week were the Innovator S&P 500 Ultra Buffer ETF (UJUL), Validea Market Legends ETF (VALX), Invesco Preferred ETF (PGX), BMO Elkhorn DWA MLP Select Index ETN (BMLP), and First Trust Nasdaq Semiconductor ETF (FTXL).

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

With U.S.-China trade tensions in focus this week, we'd like to put the spotlight on ETFs within the trade-sensitive Industrials sector. With escalating trade uncertainty clouding the outlook for this sector, here are the top 5 rated Industrials ETF from our Select List that may offer upside potential within this increasingly precarious group - First Trust NASDAQ Global Auto Index Fund (CARZ), Fidelity MSCI Industrials Index ETF (FIDU), John Hancock Multifactor Industrials ETF (JHMI), First Trust Global Engineering and Construction ETF (FLM), and First Trust RBA American Industrial Renaissance ETF (AIRR).

Thanks for reading ETF Global Perspectives and Happy Thanksgiving!

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