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Posted by on Oct 2, 2017 in ETF Strategist, Featured, Market Insight

AdvisorShares Weekly Market Review – Week Ending 9/29/2017

AdvisorShares Weekly Market Review – Week Ending 9/29/2017

Highlights of the Prior Week

2017 Enters The Home Stretch  

Macro

With the third quarter having ended, we’ll start with a recap of equity prices. For the month of September the Dow Jones Industrial Average gained 2.33%, the S&P 500 added 2.50%, the NASDAQ squeaked out 2.00% and the Russell 2000 rallied a strong 7.15%. The Q3 numbers were also strong despite having taken August off, with the Dow up 4.94%, the S&P moved ahead 3.96%, the NASDAQ positive by 5.79% and the Russell 2000 was also strong, adding 5.33%. The year to date numbers came in at plus 13.36% for the Dow, 10.64% for the S&P, 20.67% for the NASDAQ and 9.03% for the Russell 2000. The quarter also closed out on a strong, economic note with Q2 GDP having been revised up a tick to 3.1%.    

Puerto Rico is of course reeling on multiple levels from this year’s hurricane season including agriculturally. It has been estimated that 80% of its crops have been washed away. The island imports about 85% of its crops. The infrastructure was of course also decimated in terms of damaged roads and a lack of clarity as to when power will be restored. Puerto Rico of course still has a debt problem and the fallout from the storm has caused large declines in PR bond prices. One example cited by CNBC had its 8% due in 2035 trading mid-week a little above fifty cents on the dollar. There are many ETFs and mutual funds with exposure to Puerto Rico. It would be a good idea for advisors to check their holdings and be prepared answer client questions should the price declines persist.

The GOP and the President of course announced their tax plan, or at least an outline of a tax plan. Some of the highlights included fewer tax brackets, ending the AMT, ending the death tax, a cut in the corporate tax rate. The negative for now seems to be the estimates ranging from $2-$5 trillion in reduced revenue. Now congress will set to the dirty work of hammering out the details into what could actually get passed by the House and the Senate. We obviously don’t know how much will change before a final version is passed (if it ever happens) but both sides of the aisle seem to believe that the country would benefit from reform. Included in the outline was also something of a tax holiday for cash repatriation, this has happened at least one other time (under George W. Bush) with virtually no stimulative effect.

Lyft announced its fifth partnership with a car company for self-driving cars. Uber also has deal in place to transition to self-driving vehicles too. Lyft is barely five years old, Uber is less than nine years old. Part of the original appeal was a way for people to earn extra money even contributing to the vogue of the term side hustle and while the ride sharing companies were thought of as a form of creative destruction for cab companies, now there is a clear path the this form of side hustle being creatively destroyed.

Maybe not creative destruction but news that everyone’s favorite microblogging app is on the road to expanding to 280 characters, up from 140 is something of a step forward. This should make the app easier to use versus posting screenshots of longer posts. It will be interesting to see if 280 characters negative impacts Instagram which if it has a limit, might be 2200 characters.

We want to take a moment to acknowledge the mass shooting in Las Vegas and offer our condolences to anyone affected, with so many people killed and injured many of us will likely know someone who was there even if merely in a six degrees of seperation way.

ETF News

Investment News covering M&A activity in the ETF space:

Invesco Ltd. has agreed to purchase Guggenheim Partners’ ETF business in a $1.2 billion deal that will be announced Thursday, according to sources with knowledge of the deal. Invesco will acquire Guggenheim’s suite of 79 ETFs, which have $37 billion in assets. Invesco already has about $125 billion in ETF assets.The deal will expand and round out Invesco’s ETF product line, bringing its global total to 195 ETFs and making it the fourth-largest ETF provider.   

Interesting Reads

Anyone interested in Hawaiian culture will want to read this from the Atlantic about the “leprosy colony” on Molokai:

Kalaupapa remains eerily sheltered from the rest of the world even today. A common subject of small talk in the village is the one day each year that a barge lands with supplies, including gas and food, when the water is calm enough for it to dock. But Kalaupapa is as breathtaking as it is haunting, marked by white-sand beaches, coral reefs, and tiny bungalows that look as if they’re frozen in time. It is, in some ways, a version of the Hawaii that was—pre-Waikiki, pre-World War II, pre-Five-0.

Sports

Mark Cuban lent his plane to Mavericks player J.J. Barea for the relief effort in his native Puerto Rico:

Courtesy of Mavs owner Mark Cuban, the Puerto Rican player flew to his native country on the plane to rescue his family and deliver supplies, and he plans to return Tuesday night, ESPN’s Tim MacMahon reported. Cuban later retweeted a Facebook post showing the team’s plane being loaded up Monday with supplies. Barea first appears just before the eight-minute mark.

Source: Google Finance, Yahoo Finance, Wall Street Journal, SeekingAlpha, Bloomberg, Ycharts.com, Reuters, Barrons, ETF.com, XTF.com, Bespoke Investment Group, CME Group, Washington Post, The Atlantic, Investment News, CNBC

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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