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Posted by on Jan 12, 2015 in Market Insight

AdvisorShares Weekly Market Review – Week Ending 1/9/2015

AdvisorShares Weekly Market Review – Week Ending 1/9/2015

Highlights of the Prior Week

Macro

The non-farms jobs report delivered 252,000 new jobs created with the headline unemployment rate dropping to 5.6%. The broader U6 measure down ticked to 11.2% In 2014 there was a total of 2.9 million new jobs for the calendar year which was the most for one year since 1999. On the negative side, average hourly earnings decreased by 0.2% and the labor force participation rate fell 62.7%.

Volatility took center stage in the domestic equity markets last week. When the dust settled the Dow Jones fell 0.54%, the S&P 500 was down 0.63%, the NASDAQ gave up 0.49% and bringing up the rear was the Russell 2000 with a 1.09% loss.

Foreign markets had a split decision; Asia (mostly) up and Europe down. The Shanghai Composite led the way with a 1.63% gain followed by 55 basis points for Australia and 26 basis points for Hong Kong. The Nikkei however fell 1.46%. The FTSE 100 fell 99 basis points, the German Dax gave up 1.6% and France took the biggest hit with a 2.47% decline with much of that occurring in Friday’s session as that country’s law enforcement dealt with and resolved the tragic terror attacks.

Global yields put in some big moves last week. The US Ten year broke below 2% for more than a few minutes this time to close the week at 1.97%. The German bund ticked down to 0.49%, the French OAT was steady at 0.78%, the Swiss ten year fell 15 basis points to 0.22%, yields in Spain went up to 1.73% and Italian yields also went up meaningfully to 1.88% which is still less than the US.

Oil was of course the big story in the commodity market falling almost 7% and giving up the $50 level. Gold however was strong again last week, gaining 2.67%. In currency markets, the euro and British pound continued to fall against the dollar but as a bit of a surprise the greenback fell against the yen.

ETF News & Data

As 2014 wound down we noted a massive $25 billion, one-week inflow into the SPDR S&P 500 which naturally raised the question of window dressing. Last week’s outflow was small and unremarkable but this week was a different story with slightly more than $9 billion of outflows. While there is no way to know with certainty what is going on we will continue to pay close attention to how this trade develops.

Coinciding with the increased volatility to start 2015, there were several other large equity ETFs with roughly $1 billion of outflows each.

There were five new funds launched last week. Direxion issued four 1.25X levered equity index funds and Exchange Traded Concepts came out with an income oriented index fund.

Interesting Reads

Usually this space is reserved for non-market items but we were fascinated by the Wall Street Journal’s report that Bill Gross Helps Fuel New Fund With His Own Cash. The fund he now managed at Janus made news a few weeks ago for topping $1 billion in AUM.

According to the Journal;

But what Janus didn’t tell investors was that, in a previously unreported development, a majority of the money came from a single Southern California brokerage office—the same office where one of Mr. Gross’s personal financial advisers works, according to industry executives who have viewed confidential brokerage data. The Morgan Stanley wealth-management office in La Jolla, Calif., routed more than $700 million to Mr. Gross’s Janus fund in October and November…

Sports

Anyone who played team sports in the era before everyone receiving a trophy likely got an earful from their coach at one point or another and so may be surprised to read Why the Oregon Ducks Don’t Believe in Yelling but it is hard to argue with the results as the team prepared to square off against Ohio State tonight in the first ever national championship game.

 

Roger Nusbaum

AdvisorShares ETF Strategist

Source: Google Finance, Yahoo Finance, CNBC, Wall Street Journal, Bloomberg, Barrons, ETF.com, XTF.com, Convergex.

 

2015.1.12_chart 1Weekly ETF Flows

For January 2, 2014 to January 9, 2015

2015.1.12_chart 2S&P Sector Analysis

As for the sectors of the S&P 500, six outperformed the broad benchmark –Healthcare, Staples, Telecom, Technology, Utilities and Materials. The remaining four – Discretionary, Industrials, Financial and Energy – each underperformed. The dispersion between the top-performing and bottom-performing sectors was roughly 5.89% this week, with Energy outperforming all, and Technology coming in last.

For January 2, 2014 to January 9, 2015

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

2015.1.12_chart 3

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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