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Posted by on Jun 23, 2015 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 6/19/2015

AdvisorShares Weekly Market Review – Week Ending 6/19/2015

Highlights of the Prior Week

Last Week; Where Do We Even Start?

Macro

Last week was challenging in markets for the large decline in China and the latest twists and turns in the Greek Tragedy and it was also challenging outside of markets for the senseless killing of nine parishioners at the Emanuel African Methodist Episcopal Church in Charleston, South Carolina. And somewhere in between market and non market news is that the Wall Street Journal intends to dismiss a large portion of its personal finance staff at a time when arguably the need for personal finance content and education has never been greater.

Despite the volatility in the headlines, US equity markets had limited swings with the Dow Jones Industrial Average gained 0.63%, the S&P 500 added 73 basis points while NASDAQ went up 1.27% and the Russell 2000 led the way with a 1.62 rally.

Foreign equity markets were mostly subdued with Shanghai and Shenzhen as glaring exceptions falling 13% and 11.7% respectively with further declines on Monday as well. The story there focuses on sustainability of economic growth, how much equities have risen this year and an IPO market that could be described as being a mania.

The Federal Open Market Committee met this past week and in the subsequent press conference Janet Yellen made it clear that for now and despite concerned expressed by the International Monetary Fund a couple of weeks ago, the Fed is sticking by its stated intention to raise interest rates later this year. The nature of the IMF’s concern is that if the US raises rates while much of the developed world is lowering rates it could cause further currency volatility. Additionally the IMF is not convinced that the economy is strong enough to endure a rate hike this year.

Outside of the US and Germany, bond yields did not move much last week. The US Ten Year Treasury Note fell 12 basis points to 2.26%, the German bund yield fell eight basis points to 0.75%, the French OAT now yields 1.16%, Switzerland 0.15%, Spain 2.27% and Italy came in at 2.28%.

Most of the drop for the US ten year came on Friday as the news surrounding Greece appeared to deteriorate as the country faces repayment deadlines, questions about what would happen if there were to be a Grexit with a reversion back to the drachma (Greek residents are taking euros out at ATM machines with the expectation that if the drachma were to be reinstated it would take a dive against the euro. Russia has stepped into the mix possibly offering to extend a gas pipeline through the country which could create jobs and then possibly generate revenue in the form a toll.

West Texas Intermediate Crude fell 1.06% while gold rose 1.77%. The dollar was generally stronger last week as the euro fell 1.22%, the British pound gave up 2.13% but the dollar fell 60 basis points against the yen.

ETF News & Data

Domestic equity index funds of all market cap sizes led the inflows list last week with small-cap index funds bringing in $2.7 billion, mid-cap index funds brought in more than $2.4 billion and large cap funds added $2.3 billion. There were outflows from other equity funds but this list was dominated by bond funds from varying bond market segments and maturities.

Also making the top ten for outflows was one of the China A Shares ETFs which coincided with the three new funds launched last week, one of which was an inverse fund targeting the China A Share market which as noted above endured a rough week.

Interesting Reads

There was a bit of a dust up in France because that country’s Ecology Minister blamed global warming on Nutella. Yes, the hazelnut spread. Apparently it is not the Nutella itself but the palm oil that goes into Nutella. More from MentalFloss;

Royal certainly knows how to spread a message: Name-dropping the beloved hazelnut topping led to a flurry of reports about France’s anti-Nutella propaganda. But Greenpeace has backed up manufacturer Ferrero’s claims of sourcing its oil from environmentally-responsible areas; Italian Ecology head Luca Galletti also dismissed the claims.

Sports

Friday night Alex Rodriguez got hit number 3000 with a homerun off Tigers’ pitcher Justin Verlander. ESPN reports that Zack Hample, Who’s Retrieved 8000 Baseballs Won’t Give HR Back To A-rod. Typically with a milestone hit the team will try to put together some sort of trade that might include merchandise of some sort but according to Yankees spokesman Jason Zillo;

“As far as we’re concerned, we have done everything we could to engage this guy in some type of discussion about some type of exchange. He had none of anything we were saying. He wouldn’t engage at all.”

Also the College World Series finals begin tonight with a best two out of three format pitting Virginia against Vanderbilt who is going for its second championship in a row. Anyone who is a baseball fan should make the effort to get to the College World Series at least once in their lives. Omaha provides a great venue and environment and the players provide exciting action.

Source: Google Finance, Yahoo Finance, Wall Street Journal, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, ESPN, RT.com, MentalFloss
 
2015.6.23_Table1
 
Weekly ETF Flows

For June 15th, 2015 to June 19th, 2015

2015.6.23_Table2
 
S&P Sector Analysis

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

For June 15th, 2015 to June 19th, 2015

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

2015.6.23_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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