Monday, January 14, 2019 –Stocks finished higher for the third straight week, with Small-Cap and International markets outperforming. For the week, the DJIA was up 562.79 points, the S&P 500 rose 64.32 points, while the NASDAQ Composite gained 232.62 points.
The market gains helped make the Russell 2000 Index the last major benchmark to emerge from bear market territory. Within the S&P 500 Index, Industrial shares performed best, helped by strength in railroads and a sharp rise in Boeing. Energy shares were also especially strong for much of the week as oil prices rallied, although they gave back a portion of their gains on Friday. Financials lagged and Health Care stocks also underperformed despite the news of another large merger in the sector—Eli Lilly’s proposed $8 billion acquisition of Loxo Oncology. Volatility continued to moderate, with the Cboe Volatility Index (VIX) hitting its lowest level in over a month, while higher-valued growth stocks outperformed slower-growing value shares.
It’s a reminder that despite the uncomfortable nature of market pullbacks, volatility is in fact a normal part of investing. Being a long-term investor does not require you to ignore shifts in the market, but it does require perspective and discipline. In General, stocks are now up 10.4% from their December lows, having recouped more than 40% of the total decline. Looking at the 10%-plus pullbacks since 2010, the market regained the entire drop in an average of 90 days. This is no guarantee that recent losses will be erased in such short order, but the rally over the past few weeks is a reminder that the decline in December may not be a one-way path toward a severe bear market.
Because of the sectors success on the 1W Quant Rating of the, we’d like to highlight some substantial movement in the Technology Sector when comparing this week’s Select List to last. SPDR FactSet Innovative Technology ETF ( )takes the number one spot as a newcomer, unranked last week. Dropping one spot down to second was last week’s top pick First Trust Nasdaq Semiconductor ETF ( ). Global X FinTech Thematic ETF ( ), ALPS Disruptive Technologies ETF ( ) and iShares North American Tech-Multimedia Networking ETF ( ) round out this week’s Technology Sector Select List. Keep an eye on our Weekly Select List for crucial insights as investors continue to turn to ETPs for portfolio diversification and security in these volatile markets.
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