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Posted by on Apr 25, 2016 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 4/22/2016

AdvisorShares Weekly Market Review – Week Ending 4/22/2016

Highlights of the Prior Week

Earnings Recession Is Here, Does It Matter?

Macro

Earnings season weighed on markets last week with the sound and fury of a butterfly as trading for the broad markets was quiet and the price movements modest. Of course there were individual names that had large price swings but at the end of the week the Dow Jones Industrial Average had a smooth ride to a 60 basis point lift, the S&P 500 advanced 0.53%, the NASDAQ fell 0.65% and the Russell 2000 managed to add 1.20%.

Speaking of earnings season, Barron’s cited Voya Financial when it reported that so far Q1 earnings are down 7.2% with about 20% of companies having reported so far. In our last report we noted that earnings recessions “always” lead to economic recessions but there has never been a recession with weekly jobless claims in the 200k range.

Many of the foreign markets we cover here had larger moves in both directions. The DAX rose 3.2%, the CAC 40 gained 1.40%, the FTSE 100 had a modest 0.66% dip, Shanghai fell 3.83%, the Nikkei 225 jumped 4.25%, the Hang Seng inched up by 0.67% and the ASX 200 tacked on 1.53%.

As investors continue to figure out the yield dilemma, Barron’s had an article noting that despite the rebound since mid February, the MLP space still carries a great deal of risk. Included in the article was the positive conclusion from one analyst that “…the current MLP model is going to be the model of the future.”

Speaking of yields, the 10 Year US Treasury Note Yield jumped up to 1.88%, the German bund now yields 0.23%, Switzerland now charges its lenders 0.26% while JGBs can be had for only only 11 basis points (both have negative yields).

The quiet week in domestic equities didn’t prevent the energy market from whipping around, West Texas Intermediate Crude jumped about 10% and is closing in on the $44 mark. Gold in dollar terms added just under 2% but not before spiking up to $1270 very briefly on Thursday.  

ETF News & Data

There were five new ETFs listed last week, most of which are very specialized including one tracking Catholic values and a second to market social media fund.

There were large outflows from funds tracking the S&P 500, NASDAQ 100 and Russell 2000, although the top gainer was a different SPX tracker. More interestingly an ETN tracking VIX  futures was high up on the creations list which is unusual. VIX product have been popular for trading purposes of course but are complicated to use.

Interesting Reads

If you care about music then you’ve already read about Prince dying at the young age of 57. You may have missed Prince And The Competition, an interesting writeup from the NY Times that goes beyond the new story of his death;

But the real strangeness of Prince was in his sound: jagged pop-funk that hit the 1980s with an electric jolt. Musicians in the early ’80s found themselves surrounded by any number of new high-tech toys, instruments they hadn’t quite learned how to use. Prince figured them out, devising a new brand of dance music based on a heretofore unheard-of idea: that synthesizer and drum machines could carry a sweaty funk groove as forcefully as guitars and drums and brass sections had. Prince’s music was a triumph of minimalism, of addition by subtraction. The power of his best singles lies in what is not there as much as what is. You hear it in the eerily clattering “When Doves Cry,” which jettisons bass altogether, and in the throb of “Sign o’ the Times,” which tilts in the opposite direction, pushing a pulsing bass way out front.

Sports

Apparently Curt Schilling couldn’t control himself with regard to his social media posts and the former World Series hero was finally canned at ESPN. The Atlantic reports on Curt Schilling’s Downfall;

The sports network fired Schilling after he posted a meme on his Facebook page that appeared to mock transgender people, in apparent support of HB2, the controversial North Carolina law.

And sad news for anyone who was a fan of Big East basketball in the 1980’s; Dwayne “The Pearl” Washington Who Died At 52 Was Quite The Showman At Syracuse;

The stories sound like tall tales. There were the playground games in which a pre-teen Washington dribbled around and through NBA stars, and then the high school game when he dropped 82. They were all true, witnessed by New York hoops fans who quickly went from jaded to jaw-dropped.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, NY Times, ESPN, The Atlantic
 
2016.04.25_Table1
 
For April 18th, 2016 to April 22nd, 2016

2016.04.25_Table2
 
S&P Sector Analysis

As for the sectors of the S&P 500, five outperformed the broad benchmark – Energy, Financials, Healthcare, Materials, and Industrials. The remaining five – Discretionary, Telecom, Technology, Staples, Utilities– each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 8.44% this week, with Energy outperforming all, and Utilities coming in last.

For April 18th, 2016 to April 22nd, 2016

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

2016.04.25_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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