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Posted by on Sep 8, 2015 in ETF Strategist, Market Insight

AdvisorShares Weekly Market Review – Week Ending 9/4/2015

AdvisorShares Weekly Market Review – Week Ending 9/4/2015

Highlights of the Prior Week

A Positive Start To The Week?

Macro

As markets move closer to the September meeting of the Federal Open Market Committee where they may or may not enact one of the most talked about and speculated on rate hikes in its history we now have a mostly weak jobs report to stew over. There were 173,000 new jobs versus an expectation closer to 220,000, we should note that August reports have historically prone to upward revisions. Also favorable was the 2.2% year over year wage gain. The headline unemployment rate dropped to 5.1% while the broader U6 number printed at 10.3%. The labor force participation rate was unchanged from last month at 62.6%. Revisions for June and July added 44,000 more jobs than previously reported.

Equity market volatility continued last week with all markets declining. The Dow Jones Industrial Average fell 3.25%, the S&P 500 lost 3.41%, the NASDAQ gave up 3.00% and the Russell 2000 was only down 2.27%. For the month of August the Dow was down 6.57%, the S&P dropped 6.03%, the NASDAQ fell 6.86%, and the Russell 2000 was right in line with a 6.40% drop.

Asian equity markets were punished last week except for Shanghai which was only down 2.26% but of course that market was closed for two days for the much talked about WWII victory celebration. The Nikkei 225 fell 7.01%, the Hang Seng gave back 7.0% and the ASX 200 dropped 4.24%. European markets also fell but were less dramatic with the UK falling 2.34%, the CAC 40 sliding 3.03% and the DAX in Germany dropping 2.30%.

Equity selling abated in Monday sessions in Asia and Europe while the US was off and rallied Tuesday with a large open higher likely for the US possibly setting the stage for more volatility.

Global yields were generally lower across the board last week. The US Ten Year Treasury Note fell six basis points to 2.12%, the German bund now yields 0.67%, the French OAT yield dipped eight basis points to 1.01%, the Swiss ten year gave up three basis points to -0.14%, Spain actually upticked to 2.07% and Italy still yields much less than Spain (and the US!) at 1.87%.

West Texas Intermediate Crude had another positive week rising 3.20% to close at $45.67 but was well off of the $49.30 high hit on Tuesday. Gold fell 1.15% for the week. In an appearance on CNBC on Thursday Dennis Gartman said that he believes most of the commodity selling is now done. He doesn’t know whether it will take another month or two to bottom but that he would look to start buying.

ETF News & Data

Three new funds launched last week including a broad based emerging market fund from EG Shares that excludes China and iShares extended its suite single year municipal bond ETFs.

The SPDR S&P 500 was the leader for inflows by a wide margin bringing in $3.8 billion despite declining equity prices which raises the question of whether or not the shares were created to meet short interest demand but that appears to have not been the case. There were several other S&P 500 index funds showing up as both creations and redemptions last week.There were large creations for treasury ETFs from various providers.

Interesting Reads

Wearethemighty.com offers 5 Surprising Fact You Probably Don’t Know About The French Foreign Legion. The Legion is still a way to bury your past and go forward with a clean slate as well as this bit of Legion history;

In April 1863, a battle between the French Foreign Legion and the Mexican army showed how effective and ballsy legionnaires really could be. With a total of just 65 men, the legionnaires fought back against a force of approximately 3,000 at the Battle of Camarón. Despite the overwhelming odds, the small patrol of legionnaires inflicted terrible losses on the Mexican forces and they refused to surrender. Instead, their French officers actually called on the larger Mexican force to surrender multiple times. Holed up inside of a hacienda, only five men remained able to fight (most were killed or wounded) — and incredibly — mounted a bayonet charge against the opposing force, until they were ultimately surrounded and forced to surrender. “Is this all of them? Is this all of the men who are left?” a Mexican Major said at the time.

Sports

Many sports fans will of course be familiar with throwback or retro jerseys/uniforms that are occasionally worn for games in the four major sports. Over the weekend NASCAR Sprint Cup used throwback paint schemes for 32 cars racing in the Bojangles Southern 500 at the Darlington Raceway. From Fox Sports;

Drivers will likewise don old-school firesuits, the Goodyear racing radial tires will have classic-style white logos and the merchandise area at the track will be filled with throwback T-shirts, diecasts and other goodies for sale. Around the track, you’ll see old-school signage, like the gold Budweiser advertising that harkens back to the mid-1930s. A total of 14 members of the NASCAR Hall of Fame will be at Darlington for the weekend, and they’ll ride around the track with current drivers during the introductions before Sunday night’s race. Even the old Darlington Southern 500 parade is coming back.

Additionally NASCAR.com posted pictures of all the retro paint jobs. Our favorite was the STP number 43 driven by Aric Almirola with the number 42 Mello Yellow car driven by Kyle Larson a close second but there were a lot of great cars to see.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, Fox Sports, NASCAR
 
2015.9.8_Table1
 
Weekly ETF Flows

For August 31st, 2015 to September 4th, 2015

2015.9.8_Table2
 
S&P Sector Analysis
As for the sectors of the S&P 500, five outperformed the broad benchmark – Discretionary, Staples, Industrials, Telecom, and Technology. The remaining five – Healthcare, Materials, Financials, Utilities, and Energy – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 2.59% this week, with Discretionary outperforming all, and Energy coming in last.

For August 31st, 2015 to September 4th, 2015

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

2015.9.8_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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