Monday, May 11, 2020

A Little Light in a Murky Tunnel

Monday, May 11, 2020 - Markets this week were able to look past unprecedented U.S. unemployment numbers for the month of April being released with 20.5 million Americans out of work and an unemployment rate of 14.7% - the highest in more than 80 years, going on to stage a strong rally on Friday with Technology and Energy leading the way.  Of important note, approximately 80% of the job cuts last month were reported to be temporary layoffs, providing some encouragement that many will return to work once the coast is clear.  Investors took advantage of perceived undervaluation in the leading FANG stocks, while giving oil its first back-to-back weekly gains since February and the Energy sector a sizable boost.  This seems to be due to output cuts progressing quicker than originally anticipated, coupled with rising expected economic activity as parts of the global economy open up and restrictions are relaxed slowly with cautious optimism.  While overall health and economic challenges related to COVID-19 persist, there appears to be a bit of light emerging with increased investment in healthcare solutions and technology to fight back.  Of the 87% of S&P 500 constituents reporting Q1 2020 earnings to date, 68% have beat EPS estimates and 60% have surpassed revenue expectations.  Q1 earnings per share reported so far show being down 7.1% year-over-year vs the expectation of a 16% drop, while revenues reported to-date for Q1 came in up 0.9% year-over-year.

This week saw the Nasdaq claim positive territory for the year, rising by 6.0% by Friday’s close.  The S&P 500 Index followed with a 3.5% gain, and the Dow Jones Industrial Average rose 2.56%.

ETFG Equity Exposure Report - California-based diagnostic testing company, Quidel Corp. (QDEL), was first to be granted emergency FDA authorization to use the company’s new antigen test - Sofia 2 SARS Antigen FIA, which uses nasal swabs to detect presence of COVID-19. This is a big break in the Coronavirus battle, as antigen tests deliver results quickly and are relatively easy to produce with Quidel pledging to up production from 200,000 this week to over 1 million in the coming weeks.  The ETFs weighted most heavily with Quidel Corp. are the Janus Henderson Small Cap Growth Alpha ETF (JSML), the SSgA SPDR S&P Health Care Equipment ETF (XHE), the Invesco DWA Healthcare Momentum ETF (PTH), the Franklin Templeton Genomic Advancements ETF (HELX), and the ROBO Global Healthcare Technology and Innovation ETF (HTEC).

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 percentage 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 SuperIncome Preferred ETF (SPFF), and the VictoryShares Developed Enhanced Volatility Wtd ETF (CIZ).

ETFG Quant Losers: The ETFs with the biggest percentage decreases in their ETFG Quant Total Score this week were the First Trust Preferred Securities and Income ETF (FPE), the Invesco S&P 500 Top 50 ETF (XLG), the Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), the Elements Spectrum ETN (EEH), and the First Trust Switzerland AlphaDEX Fund (FSZ).

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

The energy sector emerged with the highest ETFG Quant scores for the second straight week, following back-to-back weekly gains in oil prices, along with increasing cuts in overall output moving along more rapidly than earlier thought.  The 5 ETFs in the Energy sector with the highest ratings from our ETFG Quant model include: the Invesco S&P 500 Equal Weight Energy ETF (RYE), the Invesco DWA Energy Momentum ETF (PXI), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the Invesco Dynamic Energy Exploration & Production ETF (PXE) and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP),

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.