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Posted by on May 16, 2016 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 5/13/2016

AdvisorShares Weekly Market Review – Week Ending 5/13/2016

Highlights of the Prior Week

Sell In May & Hide Under The Covers?

Macro

Similar to the prior week, markets started strongly last week only to rollover into declines across the board. The Dow Jones Industrial Average fell 1.15%, the S&P 500 gave up 51 basis points, the NASDAQ lost 0.39% while the Russell 2000 was down 1.10%. The Dow’s lag can be attributed the more than 2% decline for the Cupertino iWatch company which has had a rough go of late, falling 19% in the last month.

The Chinese economy and market continues to be a major talking point in markets in terms of unfulfilled potential (so far). Seeking Alpha reports that wholesale prices fell year on year for the 50th month in a row. 50! Further looking at the emerging market segment, Brazil appears to be in upheaval as President Dilma Rousseff has been suspended for six months while the country goes through its impeachment process which will still be going on when the summer Olympics start on August 5th.

The big office supply merger was scuttled during the week coming on the heels of mega mergers in the energy space and healthcare also falling through. Seeking Alpha cited Dealogic in reporting $400 billion in mergers have failed to consummate.

For the last few weeks we’ve address the string of disappointing economic data that had been reported but last week there was a notably positive Retail Sales report which reported a month over month gain of 1.3% beating expectations of 0.8%. Bespoke Investment Group reports that it was the first Retail Sales report to top expectations in over a year. Consumer Sentiment was also strong but curiously there was a big spike in weekly jobless claims up to 294,000.

Foreign equity markets were more mixed than they’ve been in recent weeks with the DAX gaining 0.84%, the CAC 40 rising 0.38%, the FTSE 100 inched ahead 0.18%, the Nikkei 225 was better by 1.87% and the ASX 200 tacking on 0.53%. The Shanghai Composite fell 2.95% and the Hang Seng gave back 1.98%.

The yield on the Ten Year US Treasury Note fell seven basis points to 1.70%. The German bund inched closer to the zero bound closing the week at 0.12%, the French OAT slid to 0.47%, the UK gilt fell also, down to 1.37%, the Swiss ten year now charges 0.30% (negative yield) and the JGB closed out at -0.10%.

Gold fell less than 1% to $1274 after mounting a run at $1300 the week before. West Texas Intermediate Crude finished quietly with a 2% lift as it inches closer to $50. The gain overcame a bit of a surprise from early in the week when Ali Al Naimi was ousted as Saudi Arabia’s Oil Minister after 20 years on the job.

ETF News

Last week was very busy as 15 new funds launched. Included was a suite of multi-factor sector funds from iShares covering nine of the ten sectors. Telecom was not included in the initial rollout.

IndexIQ made its first foray into the fixed income market with two new “core” bond ETFs.

Interesting Reads

Fortune reports How Baseball Legend Reggie Jackson Turned His Passion For Classic Cars Into A Business:

The longtime auto-lover’s first car was a ’51 Chevy he bought from his brother for $15. “It could go 55 miles per hour downhill,” Jackson recalls. Throughout his decades-long career playing for the Oakland A’s and New York Yankees—which resulted in five World Series rings—Jackson collected old cars. Once he retired from the sport, he decided to turn his other passion into a more serious hobby, often buying and then reselling muscle cars.

Sports

Here’s an odd one from ESPN; Richard Pitino (son of Rick) Won’t Fill Up Gas Tanks And It’s Costing Minnesota Money:

In addition to the private jet spending, both basketball programs spent more than allowed on hotels, private cars, birthday or holiday parties, meals and valet parking. The audit even flagged “unreasonable” spending by Pitino involving “multiple” rental cars returned without full gas tanks and instances of parking at the airport even though the team had rented a bus.

While Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, ESPN, Fortune
 
2016.05.16_Table1
 
For May 9th, 2016 to May 13th, 2016

2016.05.16_Table2
 
S&P Sector Analysis

As for the sectors of the S&P 500, six outperformed the broad benchmark – Utilities, Staples, Healthcare, Telecom, Technology, and Energy. The remaining four – Materials, Industrials, Financials, and Discretionary – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 2.47% this week, with Utilities outperforming all, and Discretionary coming in last.
 
For May 9th, 2016 to May 13th, 2016

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

 

2016.05.16_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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