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Posted by on Nov 30, 2015 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 11/27/2015

AdvisorShares Weekly Market Review – Week Ending 11/27/2015

Highlights of the Prior Week

Not As Quiet As It Seemed  

Macro

Domestic equities were mostly quiet last week and although that is what you might expect, that wasn’t necessarily a given based on the last couple of months of volatile trading. The Dow Jones Industrial Average fell 13 basis points, the S&P 500 gained six basis points, the NASDAQ added 0.46% and the Russell outperformed dramatically with a 2.31% gain.

In trying to explain why small caps have been outperforming of late Barron’s cited Joe Mezrich from Nomura Securities who expects small caps to continue to do well thanks to attractive valuations relative to large cap and economic uncertainty but with expectations of growth as evidenced by (his interpretation of) the slope of the treasury yield curve. It might be a little simpler than that because the Russell 2000 has far less exposure to the energy sector than the S&P 500.

Bloomberg had a unique look at earnings for 2015 reporting that for the first three calendar quarters earnings for S&P 500 companies have declined by $25 billion and revenue has declined by $287 billion. The decline in energy prices have obviously been a headwind along with the strong dollar.

Most of Europe was similarly flat as the FTSE 100 was up 65 basis points, the CAC 40 gained 0.36% and the DAX tacked on 1.56%. Asia saw a little more volatility with the Nikkei 225 up 1.45%, the ASX 200 fell 1.02%, the Hang Seng was down 3.02% in sympathy with the Shanghai Composite which fell 5.35% all on Friday after it was announced that Chinese officials are investigating four different brokerage firms for trading violations.

The yield on the Ten Year US Treasury Note drifted lower to 2.22% in a week with a few data points but no market moving comments by Fed officials. The German bund had a similar down tick of two basis points to 0.46%, the French OAT dipped to 0.77%, the Swiss ten year remains firmly negative at -0.34%, Spain’s yield fell a more pronounced 11 basis points to 1.52% and Italy yields an almost shocking 1.40%, shocking because that is 82 basis points lower than the US while Italy’s credit is rated BBB- by Standard & Poor’s, a fair bit worse than the US of course.

West Texas Intermediate Crude moved up 2.73% last week to $41.71 (there was a change in the front month to January). This has translated to gas at the pump being less than $2 for many parts of the country which while a positive for plenty of people is a deflationary influence on the economy and not necessarily welcome news for the roughly 10 million energy sector workers in the country (as of 2011). Some of the decline has come from creative destruction (shale formations) but so too has some of the decline come from supply growing faster than demand. This week’s Barron’s Commodity Corner column discussed the extent to which oil sitting in tankers.

This coming Friday is of course a jobs Friday with estimates calling for 195,000 new jobs and for the headline unemployment rate to come in at 5.0%.

ETF News & Data

The week wasn’t so quiet for new fund listings. Three new funds hit the market including two “enhanced beta” ETFs from Deutsche Bank.

Last week we noted the extent to which assets left broad based equity fund but they appear to have come back during the holiday shortened week. Additionally commodity funds tracking crude oil made the top ten for creations for a second week in a row.

Interesting Reads

Remember Adam Sandler’s Thanksgiving song? He first performed it on Saturday Night Live in 1992. Rolling Stone analyzes (over thinks) the song line by line including;

Sandler humbly acknowledges the fleeting nature of fame with this touching shout-out to Jimmy “J.J.” Walker, a popular actor and comedian of the 1970s, whose star had faded considerably by the 1990s. We’re still waiting for the Good Times‘ actor’s career resurgence, which should be happening any minute now.

Sports

ESPN posted a great story about Eric Berry’s return to the Kansas City Chiefs after battling lymphoma.

Last weekend, on the one-year anniversary of his diagnosis — and four months after being declared cancer-free — Berry showed again that he’s serious about making good on his promise. He did a little bit of everything in a 33-3 demolition of the Chargers, lining up at deep safety, squatting on zone responsibilities in the flat and playing off-man coverage in certain situations. Once, he slipped past two blockers to ruin a potential big gain on a screen pass.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, ESPN, RollingStone

2015.11.30_Table1

Weekly ETF Flows

For November 23rd, 2015 to November 27th, 2015

2015.11.30_Table2

S&P Sector Analysis

As for the sectors of the S&P 500, five outperformed the broad benchmark – Staples, Energy, Healthcare, Discretionary, and Materials. The remaining five – Telecom, Financials, Industrials, Technology, and Utilities – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 3.07% this week, with Staples outperforming all, and Utilities coming in last.

For November 23rd, 2015 to November 27th, 2015

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

2015.11.30_Table3

 

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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