Monday, November 9, 2020

Election Turmoil

Monday, November 9, 2020 – Stocks continued their ascent this past week, as the cloud of uncertainty over the 2020 elections slowly began to clear with Joe Biden appearing to emerge as the victor. Amongst unprecedented election turmoil, the prospect of a divided government appears to have brought some comfort to investors, with this scenario lowering the likelihood of increased regulatory burdens, an overhaul of the tax code, and other major policy changes. Additionally, with Friday's job report showing 638,000 jobs were added in October and that unemployment fell to 6.9%, the economy reaffirmed that it is trending in the right direction.

With these events bringing some relief to markets, stocks posted their best weekly performance since April, when they were just beginning their recovery from the pandemic-induced trough. For the week, the DJIA, S&P 500, and Nasdaq rose 7.3%, 6.9%, and 9.0% respectively.

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

ETFG Quant Winners: From 1-5, the ETFs posting the largest RTFG Quant score gains this week were the Dorsey Wright Micro-Cap ETF (DWMC), ETFMG Alternative Harvest ETF (MJ), WBI BullBear Yield 1000 ETF (WBIG), WBI BullBear Value 1000 ETF (WBIF), and First Trust RiverFront Dynamic Asia Pacific ETF (RFAP).

ETFG Quant Losers: Conversely, the ETFs that experienced the largest declines in their ETFG Quant scores this week were the iShares S&P 500 Growth ETF (IVW), WisdomTree China ex-State Owned Enterprises Fund (CXSE), Cambria Core Equity ETF (CCOR), First Trust Dorsey Wright Focus 5 ETF (FV), and ERShares Entrepreneur 30 Fund (ENTR).

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

With markets now largely pricing in a Biden presidency, our weekly Select List reveals some interesting candidates of beneficiaries under this scenario. A look at our top-rated thematic ETFs captures some of the segments of the economy whose prospects would be boosted under a Biden presidency.

Currently, our highest scoring thematic ETFs are SPDR Kensho Clean Power ETF (XKCP), iShares U.S. Infrastructure ETF (IFRA), Barclays Women in Leadership ETN (WIL), iShares Emerging Markets Infrastructure ETF (EMIF), Robo-Stox Global Robotics & Automation Index ETF (ROBO). The themes in this list - environmental protection/renewable energy, diversity & inclusion, and infrastructure/increased government spending - capture the shift in policies priorities from our (likely) previous administration to our incoming one.

Use our weekly Select List to monitor how market-moving events, like the election, may change the outlook for different sectors, geographies, and strategies/themes and their corresponding ETFs.

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