AdvisorShares Weekly Market Review – Week Ending 12/20/2013
Highlights of the Prior Week
Federal Coal:
In the week ended December 20, the major U.S. stock indexes performed relatively well in light of the Federal Reserve’s decision to reduce Quantitative Easing. The Fed announced it plans to finally taper its monthly asset purchases from $85 billion to $75 billion. Despite a near two percent pullback last week, indexes are still up around five percent since October, and the S&P 500 is up over forty percent since the end of 2011. With the hectic holiday schedules nearing, it is difficult to predict what we will see this month. Historically though, the Santa Claus Rally and January Effect bolster the markets this time of year.
In light of the announcement, the Barclays Aggregate remained fairly stagnant. S&P-based ETFs were the real winner in ETF creations last week, with over six billion dollars of asset growth spread out over a number of ETFs. Vanguard Midcap, VO, was the overall winner, as it took in slightly over $1.7 billion dollars.
PowerShares’ Nasdaq-based QQQ lost nearly $600 billion this week, but the biggest loser was gold-based SPDR GLD, which lost over $730 billion. Over the past year, the value of gold has fallen by over 27%.
Prior to last week’s uncertainty surrounding the Fed, Emerging markets dollar-pay debt spreads were tighter last week at 313 basis points over US Treasuries, meaning global investors do not view potential risk to be terribly frightening. S&P upgraded Mexico to BBB+ in recognition of its landmark energy reform.
Weekly ETF Flows
For December 16, 2013 to December 20, 2013
S&P Sector Analysis
As for the sectors of the S&P 500, four outperformed the broad benchmark – Materials, Industrials, Financials, and Technology. The others– Healthcare, Energy, Discretionary, Utilities, Staples, and Telecom – all underperformed. The dispersion between the top-performing and bottom-performing sectors grew to 2.58% this week, with Industrials outperforming all, and Telecom coming in last.
For December 16, 2013 to December 20, 2013
Sector performances, as measured by the S&P 500 sector indices were:
