Monday, October 5, 2020 - President Trump’s positive Covid-19 test results plus a disappointing US jobs report caused stocks around the world to tumble on Friday. The U.S. President is currently being treated at Walter Reed hospital for a virus that has already taken 200,000+ American lives. The US Jobs report, which was supposed to be the news of the day, was a disappointment as well. A total of 661,000 jobs were added during the month of September, however, economists were expecting well over 1 million. Despite all this negativity, the three major US indices still finished up on the week. The Dow Jones Industrial Average closed at 27,682, a gain of 509 points, the S&P 500 finished at 3,348, a gain of nearly 165 points and the Nasdaq Composite rose to 11,075, a climb of 162 points.
In ETFs, we saw outflows from some of the most popular index-based ETFs. SPY, the SPDR S&P 500 ETF, lost over $3.8B in assets during the week. That was followed by IWM, the iShares Russell 2000 ETF which shed about $420M in assets. In inflows, we saw investors move their assets into some of the treasury bond ETFs. TLT, the iShares 20+ Year Treasury Bond ETF, gained over $1.7B in AUM. The IEF, the iShares 7-10 Year Treasury Bond ETF, also gained over $4.7M 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.
This week we highlight some substantial movement in the Basic Materials portion of the Select List. The First Trust Materials AlphaDEX Fund leapfrogged the competition climbing from 5th to take the number one spot. In a nearly as impressive feat, moving from 4th to 2nd was the VanEck Vectors Gold Miners ETF. The 3rd and 4th spots are held by the SPDR S&P Metals & Mining ETF and the Invesco S&P SmallCap Materials ETF, respectively. Rounding out the top 5 was the VanEck Vectors Steel Index Fund.
History shows October is typically the worst performing month during an election year, however, an overall positive third quarter has the potential to propel the market to strong year-end gains. The fourth quarter is often the best quarter of the year for stocks with average gains of 3.9%, this plus a potential second economic stimulus package should end 2020 on a much needed high note.
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