Markets Dance to Covid Beat

Monday, September 28, 2020 - The S&P 500 finished down .63% while the Nasdaq Composite finished up by 1.11% on a strong Friday rally by the WFH stocks. The broad market as measured by the S&P 500 closed the week at 3,298.46. The NASDAQ Composite closed 10,913.56. The failure of congressional and administration negotiations to pass another round of stimulus by the Congress thru Friday did not help support the market, however weekend discussions on a leaner stimulus package will provide support to US equities if a deal is reached this week. Neither Party wants to be responsible for a bear market before the election.

The NASDAQ Composite broke its 4 week selloff Friday while the S&P 500 and Russell 2000 continued their downward trends. “Work from Home” themed stocks rose on reports that the Covid 19 virus was sweeping thru Europe in a strong second wave, leading to new lockdowns in the UK and other nations. Violent protests erupted against new lockdowns across Europe. Declining prices in Value Stocks such as Industrials, Energy (Oil and Gas), Financials and Basic Materials pushed down the broad-based indexes for a 4^th straight week, resulting in indexes flirting with correction territory. Energy stocks took the prize, losing approximately 8.4% over the week. We still believe that given the strength in the IPO market, this weakness represents a correction in the bull market.  A vaccine cannot come fast enough for investors and businesses.

All these issues got us thinking on how far the correction could go? Apparently, further as some brokerage firms increased customer margin requirements Friday. Last week, High Yield spreads widened over Investment Grade by 40 bps in an apparent sign that investors are concerned about a slowing economy and weaker corporate cash flows. The much-hyped notion of a V Shaped Recovery appears to have been replaced by the K Shaped narrative. Virus resurgence, a contested November election and a stalled economy resulted in investors repricing risk assets in September. Given the upcoming elections in November, investors and traders should be especially ready to take advantage of volatility on both the down and upside.

As of early Monday morning, most overseas markets are up.  However, investors will be focusing on continued weakness of oil prices and concerns that the virus resurgence will continue to weaken the global economy and resulting social instability.  There are many ETFs which track risk assets.  These can be found in our ETFG Screener and the ETFG Weekly Select List.

To best support the ETF selection process, The ETFG Weekly Select List highlights the 5 most highly rated ETFs per Sector, Geographic Region, Theme, and Strategy as ranked by the ETFG Quant model. 

We suggest keeping a mindful eye on tools like our Select List and Risk and Reward Ratings that can be used to evaluate the vast set of opportunities in the ETF marketplace. Today’s market realities require a new approach to macro investing, one in which individual investors now have access to tools via ETPs to customize risk and return profiles in their portfolios. Use our Scanner to find those funds.

Thank you for reading the ETF Global Perspectives!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick 

_______________________________________________________

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.

Tech Leaders Weaken With Market Rotation

Monday, September 21, 2020 - US markets closed down last week with the S&P 500 finishing down .64% and the Nasdaq Composite .56%. The broad market, as measured by the S&P 500, closed the week at 3,319.47. The NASDAQ Composite closed at 10,793.28. Nevertheless, the indexes hide the pain felt by investors in the hot tech stocks, some of which got hit with corrections of more than 5% in a single day.

The NASDAQ Composite and S&P 500 continued their 3 week sell off as the US Equity Markets continued their rotation into so called Value Stocks i.e., cyclicals, energy and to some degree less popular names that do not fit in the Work From Home theme. Encouraging reports on COVID 19 vaccine progress were not enough to support the tech sector. Commentary by Fed Chairman Jerome Powell that the Federal Reserve plans to keep its overnight fed funds rate target at 0 -.25% until 2023 and continue to flood the system with liquidity until the unemployment level returns to the 3.5% also weren’t enough to stem the tide. The NASDAQ 100 ETF, QQQ, on Thursday hit correction territory as it dropped 10.7% from its closing high on Sept 2^nd.

Despite the softening of the lead FAANG tech names, investors continue to show strength in Tech IPOs as SnowFlake more than doubled on its first day of trading at a valuation of 100x Sales. If you believe that the market bottomed this year in March, then this could be evidence of a young bull market. We, however, are not so sure that the worst is over.

All these issues got us thinking about seasonality. As we enter the Fall, September and October are traditionally characterized by market turbulence particularly after coming out of August’s strong performance. Market leadership rotations are typically accompanied by sudden and strong corrections to the stocks of the day. This is what we are experiencing. We note that for the week ended September 6^th, outflows from money market funds were approximately $50.5 Billion while ETFs added some $9.9 Billion split between equity and fixed income ETFs. Investors do not add funds to stocks if they believe they are going down.

Given the upcoming elections in November, investors and traders should be especially ready to take advantage of volatility on both the down and upside.

As of early morning today, overseas markets are weak with investors focusing on weakening oil markets and concerns that the virus resurgence will continue to weaken the global economy. Traders and active investors can use ETFs to take advantage of real-time market volatility – both up and down! 

To take advantage of this leadership rotation, we suggest looking at our ETFG Weekly Select List. To best support the ETF selection process, The ETFG Weekly Select List highlights the 5 most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model. 

We suggest keeping a mindful eye on tools like our Select List and Risk and Reward Ratings that can be used to evaluate the vast set of opportunities in the ETF marketplace. Today’s market realities require a new approach to macro investing, one in which individual investors now have access to tools via ETPs to customize risk and return profiles in their portfolios. Use our Scanner to find those funds.

Thank you for reading the ETF Global Perspectives!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick 

_______________________________________________________

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.

Less Tech Appetite

Monday, September 14, 2020 - US Indexes continued to decline during this shortened holiday week as investors continued to shy away from large technology stocks which had made historic runs earlier this year.  For the week, the Dow Jones Industrial Average lost 830 points closing at 27,665. The S&P 500 lost 120 points to 3,340 while the Nasdaq Composite lost roughly 530 points to close at 10,853.

In ETFs, we saw outflows from some of the large index-based ETFs. IWM, the iShares Russell 2000 ET, lost over $524M in assets during this week. That was followed by IVV, the iShares Core S&P 500 ETF which shed about $350M in assets. In inflows, we saw investors move their assets into some of the largest fixed income ETFs in the Marketplace. SHV, the iShares Short Treasury Bond ETF, gained over $1B in AUM. That was followed by BNDX, the Vanguard Total International Bond ETF, which gained over $863M in assets. This all according to our ETFG Fund Flow Summary.

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

Because of this strategy’s success, we highlight some substantial movement in the Technology portion of this week’s Select List. The First Trust Cloud Computing ETF, SKYY, jumped up one spot from second to hold the number one spot this week. Moving from fourth to second place this week was, DTEC, the ALPS Disruptive Technologies ETF. Holding strong at 3^rd place was CIBR, the First Trust Nasdaq Cybersecurity ETF. Rounding out the list this week were two new comers. OGIG, the OShares Global Internet Giants ETF and PRNT, the 3D Printing ETF, finished 4^th and 5^th on the list respectively.

This week, we will pay close attention to some of the big tech IPOs hitting the marketplace and see if they can help fuel investors spirits. This paired with some good news on the coronavirus vaccine front, where AstraZeneca was allowed to restart their stage 3 trial after news of a potential side effect, may get the week off on the right foot. As mentioned last week, there is a large rebalance coming at the end of this week that we will be monitoring. This has the potential to create some big moves in the ETF industry as some of the largest ETFs will be taking part.

Thanks for reading ETF Global Perspectives and we hope you have a great week!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick 

_______________________________________________________

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.

Let Us Never Forget

 

A Pause for Labor Day

Tuesday, September 8, 2020 - With the summer months coming to an end, investors seemed to have taken a vacation from some of the hottest performing sectors during this year. Namely, technology stocks which saw incredible outflows this week as investors cleaned up on some of the gains they made throughout the year.

For the week, the Dow Jones Industrial Average lost roughly 415 points closing at 28,133. The S&P 500 lost 78 points to 3,426 while the Nasdaq Composite lost roughly 408 points, or 3.4%, to close at 11,313. For the Nasdaq, that was about half of the gains they index took in over August.

In ETFs, we saw outflows from some of the large fixed income ETFs. TLT, the iShares 20+ Year Treasury Bond ETF, lost over $700M in assets during this week. That was followed by HYG, the iShares iBoxx $ High Yield Corporate Bond ETF, which shed about $620M in assets. In inflows, we saw investors move their assets, interestingly, into one of the largest Tech Short funds in the ETF Marketplace. TQQQ, the ProShares UltraPro QQQ, which is a tripled levered short Nasdaq-100 ETF, gained over $850M in AUM. That is a roughly 10% gain in AUM for the short-term tactical fund. This all according to our ETFG Fund Flow Summary.

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

Because of this strategy’s success, we’d like to highlight some substantial movement in the Basic Materials portion of this week’s Select List to last. The First Trust Materials AlphaDEX Fund, FXZ, jumped all the way up from last place to first place week over week. Following that was a newcomer, RTM, the Invesco S&P 500 Equal Weight Materials ETF, which pushed PSCM, the Invesco S&P SmallCap Materials ETF into the 3^rd overall position. Rounding out the list this week was XME, the SPDR S&P Metals & Mining ETF and XLB, the Materials Select Sector SPDR Fund, which finished 4^th and 5^th on the list respectively.

As we continue through the month of September, one major dynamic to watch in the ETF Landscape will be the rebalance coming up on the 3^rd Friday of the month. Major indices, including the S&P and several of Russell’s indexes, will be revamping their holdings’ weights which can cause some further volatility in the marketplace. Be sure to look out for some of our research on this topic in the coming days.

Thanks for reading ETF Global Perspectives and we hope you all had a wonderful Labor Day!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick 

_______________________________________________________

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.

Kaplan Schweser® and ETF Global® Announce Educational Alliance

Wednesday, September 2, 2020 - Kaplan Schweser® (www.schweser.com), a premier teaching, tutoring and certification platform, is excited to announce an Educational Alliance with leading financial data and research provider ETF Global® (www.etfg.com) to enhance and expand ETF Global’s worldwide investing competition for university students, including offering scholarships to the winners for the first time!

Since the fall of 2015, the semi-annual ETF Global® Portfolio Challenge® (www.etfportfoliochallenge.com) has drawn thousands of students from six continents and nearly 500 colleges and universities. In this online simulated investment competition, students learn about Exchange-Traded Funds (ETFs) by building a portfolio of investments and working to maximize the virtual returns.

“Kaplan Schweser is proud that our tools and resources will support undergraduate and graduate students participating in the ETF Global Portfolio Challenge,” said Brandon Lindsay, Regional Director of Universities at Kaplan Schweser. “For more than 80 years, we have helped students gain a competitive edge and prepare for their professional lives. Through this new educational alliance, we are excited to help train the next generation of global investors and finance professionals.”

Kaplan Schweser will provide program participants with a selection of pre-recorded investment education materials, a live “Which Designation is Right for Your Career?” webinar as well as a dedicated website for those interested in buying its CFA or CFP Wealth Advisory or FINRA Securities preparatory offerings at 10% discount off the retail price.

In addition, Kaplan Schweser will offer CFA PremiumPlus Package (Core + Instruction + Review + Live Online Weekly Class + 3 Day Review) valued at $1,499 each as prizes to the competition’s top 5 finishers. Those winners will also be recognized online, at www.etfportfoliochallenge.com and www.etfg.com, and at the leading ETF industry conference, The ETP Forum (www.etpforum.org), held in New York City by The Expert Series.

“The combination of Kaplan Schweser’s library of educational information with ETF Global’s industry-leading ETF Data and Research applications will provide our participants with deep, well-rounded resources to support their investment education process,” said Russell Minetti, who leads the Portfolio Challenge at ETF Global®. Minetti added, “With this new partnership and informational benefits it provides, our students have an unmatched opportunity to apply and supplement what they learn in the classroom to a simulated investment experience.”

Students participating in the ETF Global Portfolio Challenge are granted a complimentary subscription to ETF Global’s Research applications at www.etfg.com during the contest, and the subscription continues until graduation.

University students interested in the ETF Global Portfolio Challenge® can learn more about the competition and how to participate at www.etfportfoliochallenge.com.

Learn how Kaplan Schweser helps aspiring professionals interested in obtaining in-demand certifications and designations that enable them to advance and succeed in their careers by visiting www.schweser.com or to take advantage of the 10% off discount go to this web portal for ETF Global Portfolio Challenge participants. 

Thanks for reading ETF Global Perspectives!

ETFG 21 Day Free Trial:  https://www.etfg.com/signup/quick 

_______________________________________________________

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.