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

AdvisorShares Weekly Market Review – Week Ending 11/20/2015

AdvisorShares Weekly Market Review – Week Ending 11/20/2015

Highlights of the Prior Week

Strongest Week Of The Year?

Macro

Domestic equity markets were sneaky strong last week perhaps due to more validation that the Fed still plans to raise rates in December despite ongoing mixed economic data. The Dow Jones Industrial Average rallied 3.35%, the S&P 500 gained a similar 3.27%, the NASDAQ added 3.58% and the Russell 2000 lagged slightly with a 2.47% lift.

Foreign equities traded in synch with the US. The FTSE 100 popped 3.54%, the CAC 40 chipped in with 2.14% despite the terror attack on November 13th and the DAX advanced 3.84%. In Asia the Nikkei 225 gained 1.44%, the Hang Seng was up 1.65%, Shanghai was better by 1.38% while Australia led the way moving 4.05%.

Equities likely got a boost from a couple of successful tech IPOs, Match Group and Square, which both rallied very strongly when they hit the market on Thursday. The success came as a surprise after Square priced below its expected range. In previous market cycles, signs of a weary IPO market have been a warning sign but this bull market has been a little different as the strength of the IPO market on this go around has ebbed and flowed and based on last week appears to again be strong.

Bespoke Investment Group included some sector analysis in this week’s report. Not surprisingly energy has consistently underperformed and done so by a wide margin on a regular basis. Utilities have also had their share of struggles here and there as perceptions of higher interest rates coming have themselves come and gone. Consumer Discretionary and Healthcare also both done quite well which is interesting for a couple of reasons. Healthcare from the top down is usually viewed as a defensive sector and often outperforms later in the cycle while Discretionary tends to lag later in the cycle so these two sectors are giving a mixed signal on the current bull market. Also noteworthy in the sector discussion was the news early Monday of the mega cap pharma merger that was much anticipated and finally announced today.

The Ten Year US Treasury Note had something of a subdued week dropping two basis points to 2.26%. The German bund yield slid to 0.48% but the bigger story was two year paper being auctioned at -0.38%, the French OAT fell to 0.81%, the Swiss ten year note was fairly steady at -0.31%, Spain dropped 15 basis points to 1.63% and Italy now yields 1.49%.

West Texas Intermediate Crude fell 3.2% which is not a shocking decline but it did close below $40 for the first time since early September finishing out the week at $39.39.

The euro fell slightly more than a penny last week and has generally been trending lower amid ongoing comments from the ECB about overnight rates moving further into negative territory as well as other easing measures available to spur growth. The weakness of the other currencies is regularly cited in the argument against the Fed raising rates in December (of course this was also part of the argument against back in September as well).

ETF News & Data

Fund flows last week seemed to tell a story of risk being taken off as various broad based bond funds dominated the top ten creates list while domestic equities, emerging market equities and high yield debt dominated the redemptions list. One exception to this trend was a large positive flow into one of the oil (the commodity not energy related equities) ETFs that appears to be a bet made on a low price and not to meet increased short selling demand.

There were two new funds launched last week including an indexed based climate-friendly ETF from Factor Advisors and Etho Capital.

Interesting Reads

Bloomberg reports that The Last Land Rover Defenders Are Rolling Off The Production Line which will come as sad news for any car aficionados.

The Land Rover Defender has motored on for almost 70 years, and anyone present at the launch would still recognize it today. After making more than 2 million of the workhorses – a truck loved by Winston Churchill and the Queen of England – the company will cease production in Solihull, England, in late January.

Sports

Saturday night Notre Dame Played Boston College at Fenway Park. The game was broadcast on NBCSN and Notre Dame barely eked out a win. Doug Flutie, as he has all season, served as the analyst for NBC’s coverage. Flutie worked the game despite both of his parents passing away on the previous Wednesday one hour apart from each other. Flutie is Boston sports royalty.

Before the game the stadium observed a moment of silence. Flutie’s on air partner Dan Hicks asked acknowledged their passing on the air and asked Flutie why he was working the game. He noted the extent to which the entire family was very excited about this game and thrilled that Doug would be the announcer. Flutie went to BC of course as did his younger brother Darren (a CFL Hall of Famer) and one of Doug’s nephews is currently on the BC squad. Flutie said his parents would have wanted him to work the game so that is what he did.

As an unrelated reminder, the Maui Invitational starts today, 90 minutes before the equity market closes on ESPN2.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group
 
2015.11.23_Table1
 
Weekly ETF Flows

For November 16th, 2015 to November 20th, 2015

22015.11.23_Table1
 
S&P Sector Analysis

As for the sectors of the S&P 500, two outperformed the broad benchmark – Discretionary and Technology. The remaining eight – Telecom, Industrials, Financials, Healthcare, Staples, Materials, Utilities, and Energy – each underperformed.  The dispersion between the top-performing and bottom-performing sectors was roughly 3.05% this week, with Discretionary outperforming all, and Energy coming in last.
 
For November 16th, 2015 to November 20th, 2015

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

22015.11.23_Table3

david@mediaworksllc.com

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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