AdvisorShares Weekly Market Review – Week Ending 4/4/2014
Highlights of the Prior Week
The non-farm jobs number printed 192,000 and the unemployment rate stayed at 6.7%.
The S&P 500 was chugging along to a quiet 1% gain on the week until Friday’s 1.25% selloff (1.6% from the intraday high). Although the index did have a small gain for the week there was some very unusual activity in some of the market’s hot spots. Barron’s noted eye-popping declines in names like Facebook (NASDAQ:FB), Tesla (NASDAQ:TSLA) and Netflix (NASDAQ NFLX) which fell 9.5%, 7.8% and 7.0% respectively in the last two days of the week. Biotech has been another hot area in the market and the iShares NASDAQ Biotechnology ETF (NYSEARCA:IBB) fell 6.7% in those same two days. Barron’s observed this as being a rotation from growth to value.
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.
Over the last three weeks foreign markets have very quietly started to outperform domestic markets. From a short term low on March 14% the iShares Emerging Market ETF (NYSEARCA: EEM is up 8.1% and the iShares MSCI EMU ETF (NYSEARCA:EZU) which is a proxy for Europe is up 5.2% compared to 0.66% for the S&P 500.
Foreign markets, both developed and emerging have lagged behind domestic for more than two years. These things are of course never permanent, at some point foreign will again outperform. While it is impossible to know if this is really the time when something important is happening on this front the pendulum will swing this way and where clients asked “why do we have so much foreign” in 2013 will ask “why don’t we have more foreign” the next time foreign outperforms for any meaningful length of time.
ETF News & Data
Last week we noted almost $1 billion in creations for the Financial Sector SPDR (NYSE:XLF) perhaps in anticipation of the Fed’s ruling on the banks’ capital allocation plans and now that that has happened, XLF saw over $300 million in redemptions last week.
The iShares Russell 2000 ETF (NYSEARCA:IWM) had $884 million in outflows on the heels of a 4.4% drop in the last month compared to a small gain for the S&P 500. The two largest S&P 500 ETFs, SPY and IVV had creations of $1.3 billion and $801 million respectively and ETF.com reported that all equity funds had net creations just under $5 billion.
According to XTF.com there were no new ETFs launched last week.
Are you annoyed by the flood of selfies (self portrait photos taken with a smartphone) posted on Facebook, Twitter and Instagram? “Selfie” was the Oxford Dictionary word of the year in 2013. We recently replaced our smartphones to a Samsung and one of the camera features makes it easier to take selfies.
Although it will come as a shock to no one, scientists have linked selfies to narcissism and other forms of mental illness.
The Frozen Four will occur in Philadelphia on Thursday and Saturday. The Frozen Four is the NCAA Men’s Hockey version of the Final Four. The semi-finals will be Thursday starting at 5pm EDT on ESPN2 when Boston College plays Union followed by North Dakota versus Minnesota (these teams hate each other). The final will be Saturday April 12 at 7:30pm EDT on ESPN.
College hockey is great action and has become more popular in recent years as TV coverage has increased thanks to an increasing number of sports channels on cable/satellite programming packages.
Roger Nusbaum, AdvisorShares ETF StrategistSources: Source: Google Finance, Yahoo Finance, ETF.com, Barron’s, XTF.com, NCAA.com
Weekly ETF Flows
For March 28, 2013 to April 4, 2014
S&P Sector Analysis
As for the sectors of the S&P 500, seven outperformed the broad benchmark – Industrials, Telecom, Materials, Utilities, Energy, Healthcare, and Discretionary. The remaining three –Staples, Financials, and Technology – each underperformed. The dispersion between the top-performing and bottom-performing sectors fell to 2.13% this week, with Industrials outperforming all, and Technology coming in last.
For March 31, 2013 to April 4, 2014
Sector performances, as measured by the S&P 500 sector indices were: