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Posted by on Dec 10, 2013 in AdvisorShares, Market Insight

AdvisorShares Weekly Market Review – Week Ending 12/6/2013

AdvisorShares Weekly Market Review – Week Ending 12/6/2013

Highlights of the Prior Week

Is It the Holidays Yet?

In our last commentary, we noted the slow holiday week that did not provide us with much economic fodder. This week, the unemployment rate dropped to 7% and payrolls jumped more than expected. Third quarter GDP rose more than expected, and hit its highest mark since Q1 2012. Although the status of the U.S. budget remains up in the air, many expect Janet Yellen to maintain Chairman Bernanke’s accommodative policies. 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.

The top performing market we follow in Table 1 last week was the NASDAQ composite. Although the weekly gains were minimal, it once again maintained its outperformance for the calendar year.  Accordingly, as shown below in Table 2, the Index ETF following this sector, the PowerShares QQQ, benefitted from the most ETFs creations last week.

As investors believe yields have hit a low for the trading range, there may be a longer-term shift from fixed income to equity markets, but that did not occur this past week. Fixed Income markets were fairly stagnant on the week with the Barclays aggregate returning 0.07%. Related ETFs improved, as iShares’ longer term bond ETF, TLT, gained back $276 million on the week, and its Core Total US Bond Market, AGG, gained $150 million.

Domestic equity markets performed very well on the back of encouraged prospects for growth. As the U.S. Men’s National Team learned of its placement into arguably the most difficult World Cup pool, it may be of some consolation to domestic soccer fans that international equity markets had a difficult time keeping up with U.S. indices in November. Japan and Western Europe performed modestly, while Latin America and Eastern Europe returned some of their gains in a November decline. The MSCI Emerging Market Index and the MSCI EAFE Index both experienced negative returns. The Vanguard FTSE Emerging Markets ETF, VWO, lost over $630 million in assets this past week.

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Weekly ETF Flows

For December 2, 2013 to December 6, 2013

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S&P Sector Analysis

As for the sectors of the S&P 500, six underperformed the broad benchmark – Industrials, Financials, Healthcare, Telecom, Discretionary, and Materials. Conversely, the Technology, Utilities, Staples, and Energy sectors outperformed.  The dispersion between the top performing and bottom performing sectors shrunk to 1.92% this week, with Utilities outperforming all, and Telecom coming in last.

For December 2, 2013 to December 6, 2013

Sector performances, as measured by the S&P 500 sector indices were:

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