AdvisorShares Weekly Market Review – Week Ending 2/7/2014
Highlights of the Prior Week
The Non Farm Payroll number hit on Friday at 113,000 with the unemployment rate at 6.6%. Revisions added 34,000 for the last two months including just 1000 jobs added to last month’s dreadful number. Labor Force Participation ticked up to 63%.
Weather will likely draw some blame for the slowdown versus expectations but the ongoing sluggishness of the job “recovery” underscores the extent to which the financial crisis was complicated, the extent to which the various stimulative attempts by the Fed are providing diminished returns and we may be starting to learn whether or not the Affordable Care Act will or will not be a drag on jobs growth.
To the extent Fed Policy returns are diminished (not a new or unique argument) the plan to reduce asset purchases, the so called taper, is likely to continue. Markets may learn more about the Yellen-led Fed this week when new Fed Chair Janet Yellen speaks to congress this week.
It is probably with some sense of relief that for the first time in a few weeks, foreign markets were not a front burner story for equities. Similar to US markets, the week started poorly but recovered some toward the end of the week.
The Nikkei in Japan though was down 3% according to Yahoo Finance but of course this year has been especially rough for Japan, down 13% YTD.
Europe fared better as the FTSE 100 in the UK and the CAC 40 in France had small gains and emerging markets as measured by the iShares MSCI Emerging Markets ETF (NYSEARCA:EEM) was up 1.4% last week.
ETF News & Data
The largest inflows this past week were into bond funds; seven of the top ten. This is no doubt tied to drop in interest rates a couple of weeks ago and the early week scare in equities.
ETF.com reported that $22 billion flowed out of equity funds last week lead by the SPDR S&P 500 (NYSE:SPDR) which saw $8 billion in redemptions.
The Wall Street Journal had a fun read about ice-fishing shacks in Minnesota. Anyone who saw the movie Grumpy Old Men will have some idea of what these are but the Journal focuses on relatively lavish shacks along the lines of 5th wheels with holes cut into the floor to allow for fishing from the comfort of a warm couch in front of a big screen TV, sipping an espresso or adult beverage.
The XXII Winter Olympics is underway and despite the TV coverage provided, figure skating and snowboarding are not the only two events at the games.
The Olympics always shine a light on some sport, obscure to American audiences, that always strikes a cord of temporary popularity. In past Olympics we’ve seen this happen with short track speed skating and curling and this time around it looks like biathalon and skiathalon. As a related thought, check out team handball at the next Summer Olympics.Roger Nusbaum AdvisorShares ETF Strategist
Weekly ETF Flows
For January 27, 2014 to January 31, 2014
S&P Sector Analysis
As for the sectors of the S&P 500, four outperformed the broad benchmark – Discretionary, Materials, Financials, and Technology. The remaining six – Industrials, Healthcare, Energy, Staples, Utilities, and Telecom – each underperformed. The dispersion between the top-performing and bottom-performing sectors fell to 4.40% this week, with Discretionary outperforming all, and Telecom coming in last.
For January 31, 2013 to February 7, 2014
Sector performances, as measured by the S&P 500 sector indices were: