Monday, March 2, 2020

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 3rd 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 4th and 5th 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.

Thanks for reading ETF Global Perspectives!

ETFG 21 Day Free Trial:

Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.