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Posted by on Apr 1, 2014 in AdvisorShares, Market Insight

AdvisorShares Weekly Market Review – Week Ending 3/28/2014

AdvisorShares Weekly Market Review – Week Ending 3/28/2014

Highlights of the Prior Week

Macro

Another month has come and gone and so it is time for another jobs report which is estimated to print at 195,000 and the unemployment rate is expected to tick down to 6.6%.

Obviously the first quarter also ended and markets have not exactly picked up where they left off in 2013. On a price basis the S&P 500 finished the quarter up 1.30%. In last week’s AdvisorShares Alpha Call, portfolio manager Laif Meidell noted a slowing in equity momentum this year as manifested in the market’s sideways, distributive pattern.

The yield on the US Ten Year Note closed the quarter at 2.72% down from 3.02% at the start of the year. Most of the drop in yield came in January and have then traded sideways for the last two months.

Foreign Markets

For the quarter the larger foreign markets had the following returns;

UK down 2.23%
France up 2.22%
Germany up 0.06%
Japan down 8.91%
Hong Kong down 4.95%
Shanghai down 3.91%

 
The headlines were of course dominated by the comings and goings in the Ukraine and then into Crimea and what Russia would or would not do which echoed in markets driving very short term moves. While this is still a developing front page story, like many past similar events this will soon wind down one way or another and then forgotten shortly thereafter.

ETF News & Data

There was some unusual activity in creations and redemptions when the Financial Select SPDR (NYSEARCA: XLF) lead the way with almost $1 billion in creations. This could have been related to the Fed’s approval process for capital allocation plans involving being allowed to buy back shares or reinstate their dividends (or lift them above nominal rates) as one big step to normalcy after the financial crisis.

A couple of weeks ago the Striking Price column from Barron’s highlighted a potential opportunity in the financial sector on the assumption that the 30 banks in question would fare well. Five banks’ plans were not approved including Citigroup whose shares fell 6% on the news.

For the week XLF fell 1.29% compared to 0.48% for the S&P 500.

Interesting Reads

In this space we typically consider something from outside the world of markets and investing but this week we make an exception for a short profile of a couple in the early years of retirement who “Trade Options to Support Retirement” which was published in the Electronic Investor column in Barron’s.

The article was about their choice of trading platform and the technology they use which apparently can have them in front of five screens counting all laptops, tablets and smartphones for when they travel. They do travel a lot, gadgets in tow so they don’t interrupt their trading routine.

What makes this story so interesting is the intense level of engagement these folks have. There was no discussion of their strategy or results but they continue to engage so hopefully for their sake they are beating the odds and succeeding with their trades.

There are a lot of pixels on the web devoted to what baby boomer retirement will look like and how it will differ from their parents’ retirement. Engagement with markets for investing or trading may be one of those differences.

Sports

Major League Baseball got started for real on Sunday night (we are excluding the Diamondbacks and Dodgers series in Australia earlier in March) when the Dodgers lost to the Padres and then a full slate of games on Monday.

Off-season highlights include Robinson Cano landing in Seattle with the contract he was hoping to get from the Yankees who instead went after fragile former Red Sox centerfielder Jacoby Ellsbury and signing pitcher Masahiro Tanaka from Japan. The Tigers committed to Miguel Cabrera with a deal that will pay him $292 million for ten years and the Angels ponied up $144.5 million for a six year extension to Mike Trout.

Roger Nusbaum
AdvisorShares ETF Strategist
 
 
Sources: Google Finance, Yahoo Finance, ETF.com, Barron’s
 
 
 2014.4.1 pic 1
 

Weekly ETF Flows

For March 21, 2013 to March 28, 2014

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2014.4.1 pic 3

S&P Sector Analysis

As for the sectors of the S&P 500, five outperformed the broad benchmark – Energy, Telecom, Utilities, Staples, and Industrials. The remaining five – Healthcare, Technology, Materials, Financials, and Discretionary – each underperformed.  The dispersion between the top-performing and bottom-performing sectors rose to 4.61% this week, with Energy outperforming all, and Discretionary coming in last.

For March 24, 2013 to March 28, 2014

Sector performances, as measured by the S&P 500 sector indices were:

2014.4.1 pic 4

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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