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Posted by on Jun 15, 2015 in ETF Strategist

AdvisorShares Weekly Market Review – Week Ending 6/12/2015

AdvisorShares Weekly Market Review – Week Ending 6/12/2015

Highlights of the Prior Week

Yes, Markets Were Actually Open Last Week

Macro

Although not truly market moving the most interesting story from last week may have been the announced resignation of Twitter CEO Dick Costolo with the reigns to be taken on an interim basis @jack who is the co-founder of Twitter. To say Costolo was beleaguered would be an understatement because although there has been growth under his leadership there has been the perception by some that the growth could have been better which led to his being asked at every turn whether he would remain as CEO and while he always said yes before he obviously changed his mind.

Domestic equity markets had an even quieter week than the previous one. The Dow Jones Industrial Average gained 28 basis points, the S&P 500 added six basis points, the NASDAQ fell 34 basis points and the Russell 2000 had a 0.32% lift. Even foreign equity markets were subdued. Of the seven we follow regularly in this report only two had moves greater than 50 basis points as Shanghai gained 2.85% and Australia rose 0.84%,

In our last report we used the word bedlam to describe the action in the bond market for the week ending June 5th. And while there was some movement during the past week the net changes were modest. The US Ten Year Treasury Note yield fell two basis points to 2.38% after getting very close to 2.50% mid-week and the German bund fell one basis point to 0.83% but it flirted with 1.00% mid-week. Elsewhere the French OAT yield added five basis points to 1.21%, the Swiss ten year went up five basis points to 0.16%, Spain now yields 2.25% and Italy yields 2.21%.

Commodities traded up with West Texas Intermediate Crude rising 2.37% while gold added 0.61%. The euro gained 1.47% against the dollar and the British pound added 1.97%. The dollar gave up 1.72% against the yen.

ETF News & Data

Index provider MSCI made news last week that affects the ETF industry when it decided it would not (yet?) include equities listed on Chinese markets, this refers primarily to A-shares, in its indexes. This does not include Hong Kong listed shares which have been included in the MSCI indexes. CNBC reporter Bob Pisani opined in a blog post that this could change fairly soon which if it does would increase China’s weight in broad based indexes dramatically.

In a similar story, Saudi Arabia is opening its market, with restrictions, to foreign investors. There are a couple of ETFs that have been in registration waiting for this to happen. If these funds do come to market however there will be little to no energy exposure as companies like Saudi Aramco are state owned. The funds would likely be very heavy in financial stocks.

Fund flows had some interesting activity last week. One fund tracking the S&P 500 had almost $4 billion of inflows while another fund tracking the same index had outflows of $370 million. The two largest high yield bond funds had a combined $960 million in outflows and financial sector funds had more than $800 in positive flows.

Last week was a busy one for new funds with nine coming to the market including two actively managed funds as well as SPDR’s first foray into currency-hedged equity funds.

Interesting Reads

Earlier in the year The Art Of Manliness had an article about How To Travel Around The World With Just a 20lb Backpack. The story is really about efficiency and understanding what you really need from day to day. These sorts of articles are always interesting, maybe it’s a guy thing, as they appeal to the Jason Bourne in us, from early in the first movie when he builds his go-bag with items in his safety deposit box. While there was no mention of whether or not to have large bundles of various currencies or different colored contact lenses we would suggest adding a small roll of duct tape to your pack.

Mobility is the bread and butter of traveling minimally because there’s a certain freedom in knowing everything you need is with you and accessible. People I met along the way couldn’t believe how small my backpack was when I told them I was traveling for a year. I had everything I needed, just not very much of it. As the architectural saying goes, “Anyone can design a bridge that stands. It takes an engineer to design a bridge that barely stands.” I wanted to pack my backpack around the idea this quote represents — finding the essential amount of gear needed to make sure I was comfortable for any environment I might encounter, while also maximizing my mobility.

Sports

In a Wall Street Journal story that is somewhat reminiscent of the Jamaican Bobsled Team, Guam Soccer Takes Center Stage as it hosts Group D in the Asian region for World Cup qualifying.

“It is a life-changing moment for the soccer community and for the country as a whole, because they’ve never hosted an international event like this,” Guam’s head coach, Gary White, told The Wall Street Journal. “People have been going crazy.” The second round of qualification for the 2018 World Cup for Asian teams begins in earnest on Thursday. Guam will set the ball rolling with the first match of the day, taking on Turkmenistan at 4:15 p.m. local time.

Source: Google Finance, Yahoo Finance, Wall Street Journal, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, CNBC.com, The Art of Manliness
 
2015.6.15_Table1
 
Weekly ETF Flows

For June 8th, 2015 to June 12th, 2015

2015.6.15_Table2
 
S&P Sector Analysis

As for the sectors of the S&P 500, six outperformed the broad benchmark – Financials, Staples, Materials, Industrials, Healthcare, and Telecom. The remaining four – Discretionary, Utilities, Technology, and Energy – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 1.88% this week, with Financials outperforming all, and Energy coming in last.

For June 8th, 2015 to June 12th, 2015

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

2015.6.15_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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