Monday, November 23, 2020

Holiday COVID Spike

Monday, November 23, 2020 - Sharply rising numbers of COVID-19 cases, hospitalizations, and deaths led to some near-term pessimism on Wall Street, tempering the long-term optimism spurred by positive developments on vaccines. The S&P 500 ended the week down 0.8%, while the Dow dropped 0.7%. The tech-heavy Nasdaq ended the week slightly up, posting a 0.2% gain.

After posting eye-popping gains in earlier stages of the pandemic, tech stocks have taken a tumble in recent weeks, as studies of vaccines from Pfizer and Moderna Inc. showed positive results. When approved and mass produced, these vaccines could allow for normal life to resume at some point in 2021, boosting much of the economy, but also reducing the need for the pandemic technology solutions that have driven some stocks to unprecedented highs this year.

This week threw some cold water on that long-term COVID-19 optimism, as signs emerged that the months before vaccines are widely available could be rough. As the U.S. passed the grim milestone of 250,000 deaths from the virus, rising outbreaks were being reported in many U.S. states and throughout the world. The New York City public school system, the nation’s largest, announced a return to remote learning, and the number of jobless claims rose for the first time in 5 weeks.

ETFG Quant Movers: Those ETFs with the largest weekly change in their respective ETFG Quant Fundamental Score ratings.

ETFG Quant Winners: This week, we focus on notable movement in the ETFG Quant Behavioral Scores. The biggest increase was charted by the First Trust Health Care AlphaDEX Fund (FXH), followed by the VanEck Vectors Steel Index Fund (SLX), the Schwab Emerging Markets Equity ETF (SCHE), the SPDR Portfolio Emerging Markets ETF (SPEM), and the Columbia Sustainable International Equity Income ETF (ESGN).

ETFG Quant Losers: The ETFs with the biggest decreases in their ETFG Quant Behavioral Scores for this week are the iShares US Regional Banks ETF (IAT), the Invesco KBW Bank ETF (KBWB), the iShares International Select Dividend ETF (IDV), the iShares Core Dividend Growth ETF (DGRO) and the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC).

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

As Europe contends with its own COVID-19 resurgence, an EU recovery package has been blocked by Hungary and Poland. Negotiations continue over that 1.8 trillion Euro package, as well as post-Brexit trade agreements.

In this rapidly changing environment, our Select List has identified several opportunities in Europe-focused ETFs. Topping the list this week is the SPDR STOXX Europe 50 ETF (FEU). Two dividend funds take the next spots. They are the First Trust Stoxx European Select Dividend Index Fund (FDD) and the WisdomTree Europe SmallCap Dividend Fund (DFE).

Closing out the list are the iShares MSCI Turkey ETF (TUR) and the iShares MSCI Austria ETF (EWO).

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