Monday, April 27, 2020

Elements of the New Normal

Monday, April 27, 2020 - After a rocky start as a result of a massive oil sell-off, stocks rallied later in the week, led by the technology sector. Still, markets ended this roller-coaster week slightly down, snapping 2 consecutive weeks of gains. Oil prices fell deep into negative territory as the week began, driven down by plummeting demand and storage capacity. Passage of a $484 billion coronavirus aid package, which included additional funding for small businesses through the Paycheck Protection Program, helped markets make up some of that ground. But the economy still faces significant challenges. With another 4.4 million Americans filing for unemployment benefits in the previous week, some 26.5 million people have been laid off or furloughed in the U.S. from mid-March to mid-April.

The Dow Jones Industrial Average dropped 1.9% this week, as the S&P 500 slipped 1.3% and the Nasdaq fell 0.2%.

ETFG Equity Exposure Report - As consumers continue to turn to video conferencing services to replace in-person meetings as a result of COVID-19, Facebook (FB) shares climbed this week on reports of the company’s expanding video chat capabilities. Facebook announced that this revamped service will allow for many more simultaneous participants, which also sent investors fleeing rival Zoom Video Communications (ZM). The ETFs weighted most heavily with Facebook stock are the Communication Services Select Sector SPDR Fund (XLC), the Fidelity MSCI Telecommunication Services Index ETF (FCOM), the Vanguard Communication Services ETF (VOX), the Direxion Daily Communication Services Index Bull 3X Shares (TAWK), and the iShares Global Telecom ETF (IXP).

ETFG Quant Movers - The ETFs that had the largest weekly change in their respective, overall ETFG Quant ratings.

ETFG Quant Winners: This week, we are highlighting the ETFs that saw the largest movement in our ETFG Quant Total Score. The ETFs with the biggest increases in their ETFG Quant Total Score this week were the iPath S&P MLP ETN (IMLP), the Innovator IBD ETF Leaders ETF (LDRS), the Franklin FTSE Europe Hedged ETF (FLEH), the Global X MSCI SuperDividend Emerging Markets ETF (SDEM), and the AdvisorShares Vice ETF (ACT).

ETFG Quant Losers: The ETFs with the biggest decreases in their ETFG Quant Total Score this week were the ELEMENTS SPECTRUM ETN (EEH), the First Trust Preferred Securities and Income ETF (FPE), the Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), the iShares MSCI Finland ETF (EFNL), and the SPDR Solactive Germany ETF (ZDEU).

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

The social distancing restrictions brought on by COVID-19 have led to more reliance on technological workarounds -- and some big gains for parts of the Technology sector. This week, we’re focusing on the 5 ETFs in the Technology sector with the highest ratings from our ETFG Quant model. They are: the First Trust Nasdaq Smartphone Index Fund (FONE), the First Trust NASDAQ 100 Technology Index Fund (QTEC), the Global X Social Media Index ETF (SOCL), the iShares Expanded Tech Sector ETF (IGM), and the iShares PHLX Semiconductor ETF (SOXX).

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