Monday, July 20, 2020

Tech & Retail Drive Mixed Week Results

Monday, July 20, 2020 – U.S. equities finished the week mixed, squashing hopes of a three-peat for all major indexes to post weekly gains. The cause was a pullback in tech shares which bumped the Nasdaq into negative territory at -1.1%. However, U.S. retail shoppers provided some much needed momentum for a possible economic recovery, as reported on Thursday. This report showed that overall retail sales rose for the second month, exceeding expectations with a 7.5% increase in June. Unfortunately, this month’s spike in new U.S. coronavirus cases could weigh on July’s retail activity.

Looking at the sector break down, 7 of the 11 S&P 500 sectors finished in positive territory, with Utilities and Real Estate leading with strong gains. In earnings news, Netflix shares fell 6.5% after the streaming giant exceeded consensus revenue projections, but, presented disappointing forward guidance. For investors looking to diligence their exposure to stocks like Netflix can use the ETFG Equity Exposure Report which shows the concentration of individual equities within the universe of ETFs.

U.S.-listed ETPs saw approximately $12 billion of inflow for the week. The biggest winners on the top five list were SPDR S&P 500 ETF Trust (SPY), iShares Russell 2000 ETF (IWM), First Trust Capital Strength ETF (FTCS), Vanguard Total Bond Market ETF (BND) and Vanguard Total Stock Market ETF (VTI). SPDR S&P 500 ETF Trust (SPY) saw a huge net inflow of $3.3 billion while the remaining ETFs brought in approximately $2 billion, $1.1 billion, $725 million and $697 million in creations respectively. For outflows, the Invesco QQQ Trust (QQQ) led shedding $2.5 billion in AUM and Utilities Select Sector SPDR Fund (XLU) saw around $600 million in redemptions.

Looking ahead, earnings continues to take center stage, with approximately 20% of the S&P 500 companies reporting second-quarter stats. In addition, important economic data being released includes home sales on Wednesday and July's Purchasing Managers' Index (PMI) on Friday.

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

ETFG Quant Winners: The top five gainers in ETFG Quant Total Score were iPath S&P MLP ETN (IMLP), Innovator IBD ETF Leaders ETF (LDRS), Franklin FTSE Europe Hedged ETF (FLEH), Global X MSCI Super Dividend Emerging Markets ETF (SDEM), and AdvisorShares Vice ETF (ACT). Each ETP added approximately 10% to their overall ETFG Quant Total Score.

ETFG Quant Losers: Honorable mentions in the loser category were ELEMENTS SPECTRUM ETN (EEH), First Trust Preferred Securities and Income ETF (FPE), Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE), iShares MSCI Finland ETF (EFNL) and SPDR Solactive Germany ETF (ZDEU). Each ETF lost around 10 points in Quant Total Score and the reasons for the drop can be traced to mostly behavioral factors.

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

Considering the sector’s strong performance, we’d like to highlight the top ETFs within the Utilities sector in this week’s Select List. John Hancock Multifactor Utilities ETF (JHMU), Fidelity MSCI Utilities Index ETF (FUTY) and Invesco DWA Utilities Momentum ETF (PUI) each held on to the 1st, 2nd and 3rd place respectively. Utilities Select Sector SPDR Fund (XLU) and Invesco S&P 500 Equal Weight Utilities ETF (RYU) were the two newcomers to this week’s Select List claimed 4th and 5th respectively.

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