Coronavirus Now Impacting Earnings Estimates

Monday, February 24, 2020 - As Coronavirus cases and deaths continue to rise, investors showed a sign of retreat during this shortened trading week knocking major US indices from their two weeks of gains. For the week, the Dow Jones Industrial Average dropped 1.4% closing at 28,992. The S&P 500 and the Nasdaq Composite also were hit by the fear, losing 1.9% and 1.6% respectively. This all coming as we have started to hear of the first companies reporting that their quarterly estimates for Q1 may not be met due to the business implications brought about by the Coronavirus.

In ETFs, there were outflows from some of the largest products in the marketplace. SPY, the SPDRS S&P 500 ETF, lost about $5.3B in assets during the shortened trading week. That was followed by HYG, the iShares iBoxx $ High Yield Corporate Bond ETF, which shed about $776M in assets. For inflows, investors poured money into a low volatility ETF, SPLV, the Invesco S&P 500 Low Volatility ETF, which gained over $1.3B in assets. That was followed by IVV, the iShares S&P 500 fund, which gained over $1.1B in assets, all according to our ETFG Fund Flow Summary.

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

ETFG Quant Winners: In the ETFG Quant Movers, we saw European based ETFs gain the most percentage points to their overall scores. The Franklin FTSE Europe Hedged ETF, FLEH and the iShares MSCI Poland ETF, EPOL, added 24.26% and 20.82% to their overall ETFG Quant scores respectively.

ETFG Quant Losers: On the loser’s side, we saw safe-haven security based ETFs drop percentage points in their overall scores. The First Trust Preferred Securities and Income ETF, FPE and the ALPS Sector Dividend Dogs ETF SDOG lost 26.66% and 21.07% to their overall scores respectively.

ETFG Weekly Select List - Because of this strategy’s success, we’d like to highlight some substantial movement in the Basic Materials portion of this week’s Select List. The SPDR S&P Metals and Mining ETF, XME, held steady at the top spot on the list. Following that was a full list of newcomers compared to last week. PSCM, the Invesco S&P SmallCap Materials ETF and BATT, the Amplify Advanced Battery Metals & Materials ETF, finished in 2^nd and 3^rd this week knocking GOEX, the Global X Gold Explorers ETF and GOAU, the U.S. Global GO GOLD and Precious Metal Miners ETF off the list. Rounding out the top 5 were both SIL, the Global X Silver Miners ETF and GDX, the VanEck Vectors Gold Miners ETF which came in 4^th and 5^th respectively.

Markets seem to be paying even greater attention to the global implications the Coronavirus and will surely be watching closely this week.

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