Markets Hit Hard

Monday, March 2, 2020 - It was one of the worst weeks for US Equity Markets since the financial crisis as Coronavirus fears became very real for Investors.

For the week, the Dow Jones Industrial Average dropped 3,583 points or 12% closing at 25,409. The S&P 500 fell 11% to 2,954 while the Nasdaq Composite also knocked off 11% of its value to fall to 8,567. This coming as there is now a greater risk of a pandemic scenario created by the virus and definite supply chain and business implications for the World.

In ETFs, we saw outflows from some of the largest products in the marketplace. SPY, the SPDRS S&P 500 ETF, lost over $17B (yes, you read that correctly) in assets during this week. That was followed by HYG, the iShares iBoxx $ High Yield Corporate Bond ETF, which shed about $3B in assets or about 18% of its AUM. In inflows, we saw investors move their assets to Treasuries and safe-haven assets. IEF, the iShares 7-10 Year Treasury Bond ETF saw some of the greatest inflows for the week, gaining over $1.5B in AUM. That was followed by SPTI, the SPDR Portfolio Intermediate Term Treasury ETF, gained over $787M in assets which accounted for a 64% increase in its AUM. This all according to our ETFG Fund Flow Summary.

ETFG Weekly Select List - Because of this strategy’s success, we’d like to highlight some substantial movement in the Consumer Discretionary portion of this week’s Select List to last. The SPDR S&P Retail ETF, XRT, held steady at the top spot on the list. Following that was PSCD, the Invesco S&P SmallCap Consumer Discretionary ETF which knocked XHB, the SPDR S&P Homebuilders ETF, down one spot to 3^rd place. Rounding out the list was a swap between ECON , Columbia Emerging Markets Consumer ETF and PEJ, Invesco Dynamic Leisure and Entertainment ETF, which finished 4^th and 5^th on the list respectively, as opposed to last week when they finished in the opposite order.

As the Coronavirus seems like it will inevitably continue to spread, we will be paying close attention to how investors react to any news coming from Global governments and health agencies.  Last week, President Trump’s remarks on the spread of the virus did very little to calm the fears and unknowns in the Markets. With another week of pattern studies of the Virus and more caution taken by both the US and other Countries, some good news would be a welcome sign to get the markets back on track.

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