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Posted by on Oct 19, 2015 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 10/16/2015

AdvisorShares Weekly Market Review – Week Ending 10/16/2015

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Highlights of the Prior Week

Market Stasis

Macro

After a bump in the road to start the week, the rally in domestic equities continued as the broad indexes, excluding small caps, finished higher. The Dow Jones Industrial Average gained 0.78%, the S&P 500 tacked on 0.90% and the NASDAQ added 1.14% thanks in part to a snap back in biotech stocks while the Russell 2000 fell 27 basis points.

Foreign equities were a little more mixed. The FTSE 100 fell 59 basis points, the CAC 40 slipped a basis point while the DAX gained eight basis points. Asia was generally stronger as the Nikkei 225 rallied 2.25%, the Hang Seng was better by 2.81% and the Shanghai Composite was the big winner with a 6.54% lift.

Markets are now well into earnings season and Bespoke Investment Group notes that the “results have been far from impressive.” It notes only 54% of the companies reporting so far have beaten bottom line estimates and 41% have beaten on the top line. Next week will be important for earnings as 400 companies are due to report.

Any signs of inflation, or at least the Fed’s target for 2% price inflation as measured by the CPI, have apparently packed it in as CPI reported a drop of 0.2% month over month and flat year over year. It was also announced there would be no COLA adjustment for Social Security recipients.

With that news on board, global yields headed lower last week led by the US Ten Year Treasury Note dropping to 2.02%, the German bund fell to 0.55%, the French OAT now yields 0.91%, the Swiss ten year moved further into negative territory at -0.22%, Spain now yields 1.77% and Italy closed out at 1.60%, 42 basis points than its US counterpart.

After rallying 7.8% the week before perhaps due to Russia’s involvement in Syria, West Texas Intermediate Crude retreated 5.5% last week. Gold pushed higher again last week by 1.78%.

ETF News & Data

There was only one new ETF last week. It targets immunotherapies for cancer treatment which evokes memories of the HealthShares suite of ETFs which closed in 2008 and included funds that specialized in areas like opthalmology, dermatology & wound care and a cancer fund.

Inflows and outflows were diverse but noteworthy last week with positive flows into gold, consumer discretionary and energy while there were large outflows from biotech and short dated treasuries.

Interesting Reads

Mental Floss had a fun story about The World’s Loneliest ATM In Antarctica which gets serviced every two years and whose technicians must go through a psychological evaluation before going to work on the cash dispensers.

The banking conglomerate installed an automatic teller machine (ATM) back in 1998 at McMurdo Station, the largest science hub on the continent. Depending on the season, McMurdo’s population ranges from 250 to more than 1000. And like any small community, commerce is crucial. In order to patronize the coffee shops, general stores, bars, or post office, money is exchanged in what amounts to a closed economy. Some places only accept cash; others have a credit card minimum that’s hard to meet when you need just a couple of items.

Sports

You may have heard that Twitter Suspends Deadspin, SBNation Accounts for Violating Copyrights of the NFL by posting GIFs and short video clips.

From re/code’s coverage;

Professional sports rights are incredibly expensive, with major TV outlets paying millions of dollars for the right to air games as well as highlights. Sports is still one of the few things audiences consistently watch live, maintaining its ad value even as TV ratings overall have started to decline.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, re/code, Mental Floss
 
2015.10.19_Table1
 
Weekly ETF Flows

For October 12th, 2015 to October 16th, 2015

2015.10.19_Table2
 
S&P Sector Analysis

As for the sectors of the S&P 500, five outperformed the broad benchmark – Utilities, Healthcare, Telecom, Financials, and Technology. The remaining five – Energy, Discretionary, Staples, Materials, and Industrials – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 3.50% this week, with Utilities outperforming all, and Industrials coming in last.

For October 12th, 2015 to October 16th, 2015

As measured by the S&P 500 sector indices, respective performances were:

2015.10.19_Table3a
2015.10.19_Table3b

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