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Posted by on Nov 17, 2014 in Market Insight

AdvisorShares Weekly Market Review – Week Ending 11/14/2014

AdvisorShares Weekly Market Review – Week Ending 11/14/2014

Highlights of the Prior Week

Macro

In our update last week we had a lot of ground to cover with all the activity in markets as well as external events with the potential to move markets. Fast forward one week and activity could best be described as tumbleweeds rolling through town or the sound of crickets chirping.

The S&P 500 traded in a very narrow range closing up 38 basis points on the week.  The other domestic indexes put in similar showings with the Dow Jones Industrial Average advancing 36 basis points, the NASDAQ had a little more life with a 1.21% lift and the Russell 2000 went up by five basis points.

Most of Europe was similarly quiet; the DAX in Germany down 42 basis points, France up 30 basis points with the UK putting in the best showing with a 1.22% gain. Asia was where the action was with the Hang Seng rising 2.28%, the Shanghai Composite up 2.51% and the Nikkei resumed its big rally going up 3.62% after taking a breather last week. The Nikkei gave most of that gain back on Monday when it was reported that Japan’s GDP contracted for a second quarter in a row.

The lack of action in the equity market was mirrored in the bond market. The yield on the US Ten Year Treasury Note went up one basis point to 2.32%. The German ten year dipped to 0.78%, the French OAT traded down to 1.14%, Spain yields 2.13% and Italy’s spread to the US narrowed to three basis points at 2.35%.

Commodities were mixed as gold added 2.2% and West Texas Intermediate Crude fell another 4%. Of the decline in crude, Stephanie Pomboy of Macro Mavens was quoted in Barron’s as saying crude priced in the mid $70s is a net negative on the economy with the idea being that benefit lost to workers and companies in the patch more than offsets the cheaper price that Americans are paying at the pump.

In currencies the euro was slightly higher against the US dollar, the British pound however fell more than a percent against the greenback and the dollar continued its strength against the yen.

ETF News & Data

For the second week in a row fund flows were dominated by the SPDR S&P 500 which again brought more than $6.5 billion and an additional $1 billion went into competing S&P 500 index ETFs. Gold topped the outflows board with $445 million.

In total $11.1 billion flowed into equities, mostly domestic, and fixed income funds added $700 million. The recent trend of outflows from the materials sector continued last week as $253 million exited.

There were four new funds launched last weeks covering bonds, emerging market equities and a specialty fund covering cyber security that appropriately trades with the symbol HACK.

The biggest news in the ETF world last week was the SEC weighing in on Eaton Vance’s request for clearance to offer actively managed, non-transparent ETFs. The SEC said yes and no. The yes was to non-transparency but no, they cannot be known as ETFs, they will instead be known as exchange traded mutual funds. The industry at large still has a lot to learn but AdvisorShares CEO Noah Hamman weighed in last week with an excellent starting point for learning about the new fund in an Alpha Baskets blog post titled New Innovation, Just Not In The ETF Space.

Interesting Reads

In recent years Brooklyn has become a very popular place to live for its proximity to Manhattan and for being relatively affordable. It has been gentrified, remodeled with access to many more shops and restaurants and now it too has become too expensive and prospective buyers are being priced out into the New Jersey suburbs. The NY Times covered this extensively in Life After Brooklyn.

If New Jersey doesn’t sound appealing there’s always Living Life As A Vagabond.

Sports

The New York Times posted a fun article about a young lawyer taking a career sabbatical to follow his beloved Knicks to see all 82 games this season. He has three passions in life; traveling, writing (he has created a blog to chronicle his odyssey) and the Knicks so this allows him to combine all three.

The college basketball season is underway with a couple of big annual events coming over the next couple of weeks. Well, big for college basketball fans anyway. The ESPN family of networks will have their annual Tip Off Marathon, 24 hours of continuous games. In the pursuit of bigger must be better (and in this case it is), games will start Monday night November 17th at 7pm EST on ESPNU, moving over to ESPN2 and then on to ESPN the original after that for 28 at and half hours of coverage. We’ll be curious to see if trading volume drops that day.

Roger Nusbaum

AdvisorShares ETF Strategist

Source: Google Finance, Yahoo Finance, Wall Street Journal, Bloomberg, Barrons, ETF.com, XTF.com, New York Times, Convergex

 

Weekly ETF Flows

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For November 10, 2014 to November 14, 2014

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S&P Sector Analysis

As for the sectors of the S&P 500, four outperformed the broad benchmark – Telecom, Discretionary, Technology and Materials. The remaining six – Industrials, Healthcare, Staples, Financials, Energy and Utilities – each underperformed. The dispersion between the top-performing and bottom-performing sectors was roughly 5.09% this week, with Telecom outperforming all, and Utilities coming in last.

For November 10, 2014 to November 14, 2014

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

2014.11.17_Picture3

 

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.

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