Monday, February 1, 2021

GameStop Battle Steals the Weekly Show

Monday, February 1, 2021 – It is hard to imagine that many stories in the weeks leading up to Super Bowl LV between the Kansas City Chiefs and the Tampa Bay Buccaneers could steal the headlines so demonstratively but then came the GameStop stock battle – more on this later in the post.

Despite closing at new, record highs on Monday, domestic equity indices experienced a pullback last week. While much market attention was paid to GameStop, many of the same market forces persisted such as our continuing battle against the Coronavirus and politically, a bipartisan group of Senators resisting and countering the most recently proposed $1.9 trillion coronavirus relief package. Additionally, the Federal Reserve released a statement midweek that the speed of economic activity and employment had fallen off in recent months. For the week, the DJIA fell off -1,014.36 to 29,982.62, the S&P 500 lost -127.23 to 3,714.24 and the NASDAQ closed down -472.37 to 13,070.69.

Any focus on constituents held within ETFs would not be doing justice without some focus on last week’s wild ride in GameStop stock. There are so many tangential storylines here that include additional target stocks such as AMC and Blackberry as well as other firms now embroiled in this insane war like Reddit, Robinhood, TD Ameritrade and WeBull. In a nutshell, a large online chat community that emanated from a Reddit stock trading forum took the other side of the massive bets made against GameStop stock and inevitably spiked the stock high enough to squeeze the short sellers. There are also all kinds of investor profile stories here creating the drama of a war between established Wall Street investors and internet traders. In the world of ETFs, two funds to watch closely, with large allocations to GameStop, include the Wedbush ETFMG Video Game Tech ETF (GAMR) and the previously much larger SPDR S&P Retail ETF (XRT) which experienced massive outflows during last week. From all we can tell, there should be plenty more to watch on this saga in the coming trading days.

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

ETFG Quant Winners: The Global X MSCI Portugal ETF (PGAL) rose 12.17 points to a Total ETFG Quant score of 53.84, the VictoryShares Developed Enhanced Volatility Wtd ETF (CIZ) gained 11.39 points to 50.38 and the JPMorgan US Momentum Factor ETF (JMOM) picked up 11.29 points to increase its Total ETFG Quant Score to 49.82.

ETFG Quant Losers: On the other side of these movements, the three largest drops in their respective Total ETFG Quant Scores were found in the WisdomTree U.S. SmallCap Quality Dividend Growth Fund (DGRS) which lost 16.65 points to 34.89, the WisdomTree U.S. MidCap Dividend Fund (DON) which dropped 15.46 points to 29.92 and the SPDR S&P Pharmaceuticals ETF (XPH) which fell 10.32 points to wrap up the week at 39.52.

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

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