/Short Week, Active Mix

Short Week, Active Mix

Monday, September 9, 2019– A resumption of US-China trade talks and a positive, yet slowing, pace of hiring revealed in Friday’s August jobs report helped propel stocks to a second consecutive week of gains. In a holiday-shortened week, the DJIA, S&P 500, and Nasdaq rose 1.5%, 1.8%, and 1.8% respectively.

Investors continued to navigate a tenuous and divergent array of economic signals, with the announcement of high level US-China discussions in October and the ostensible relaxation in trade tensions proving to wield the largest influence on market sentiment. Receding geopolitical risks, including the formation of a stable Italian governing coalition and bleaker prospect of a hard-Brexit, helped further lift animal spirits. Domestic economic data releases showed that, while hiring slowed, wage growth is positive, unemployment remains near a record low, productivity is growing and the services sector is expanding. Furthermore, while largely positive, the picture painted by this week’s data releases did little to alter expectation for Fed rate cuts, adding further support to equities. Favorable domestic data was augmented by dovish global central bank actions, with the PBOC’s reduction of bank reserve requirement and the loosening of Russian central bank policy.
Despite this series of encouraging developments, other signs pointed to the downward impact of global trade tensions. Tuesday’s ISM manufacturing index showed that US manufacturing activity contracted to a 3 year low. This added to the increasingly gloomy global manufacturing outlook, in which countries such as Japan, South Korea, and the U.K. have all recently reported slowing activity, weighed down by the sharpening of global trade hostilities. This sort of data lays bare the increasingly fraught nature of the current market environment, in which the longer trade tensions remain unresolved and this cloud of uncertainty looms, the more economic decision making and global growth will be constrained.
ETFG Quant Movers – Those ETFs who have had the largest weekly change in their respective, overall ETFG Quant ratings.
ETFG Quant Winners: The top funds registering the largest gains in their Quant Total Score were Global X Scientific Beta Asia ex-Japan ETF (SCIX), Global X MSCI China Financials ETF (CHIX), First Trust Indxx Global Natural Resources Income ETF (FTRI), ProShares MSCI Europe Dividend Growers ETF (EUDV), and Invesco Global Revenue ETF (RGLB). The global orientation of these funds shows the boost provided by this week’s de-escalation in trade tensions.
ETFG Quant Losers: The funds suffering the largest declines in their Quant Total Score were Ivy Focused Value NextShares (IVFVC), iShares Core MSCI EAFE ETF (IEFA), Invesco S&P 500 High Beta ETF (SPHB), First Trust Developed Markets ex-US AlphaDEX Fund, and SPDR S&P Telecom ETF (XTL). An assortment of reasons contributed to these funds declines, including unfavorable idiosyncratic factor approaches, sector exposures, or geographic orientations.
ETFG Weekly Select List – The five most highly rated ETFs per Sector, Geographic Region and Strategy as ranked by the ETFG Quant model.
Given their sensitivity to global trade and manufacturing activity, we’d like to focus on the 5 most highlighted rated funds within the Basic Materials and Industrials sectors. In Basic Materials, our model currently ranks Global X Gold Explorers ETF (GOEX), U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU), SPDR S&P Metals & Mining ETF (XME), iShares MSCI Global Silver Miners ETF (SLVP), and Sprott Gold Miners ETF (SGDM) as the 5 most promising funds. Within Industrials, First Trust NASDAQ Global Auto Index Fund (CARZ), First Trust Global Engineering and Construction ETF (FLM), SPDR S&P Kensho Smart Mobility ETF (HAIL), John Hancock Multifactor Industrials ETF (JHMI), and First Trust Nasdaq Transportation ETF (FTXR) rank as the highest funds according to our model. Amid heightened, trade-induced volatility, it is imperative to be particularly discerning when considering investments in these sectors. Our Select List can serve as a guide to navigate these choppy waters and unlock hidden upside.
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ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.
This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.  Any opinions expressed herein are given in good faith, are subject to change without notice, and are only correct as of the stated date of their issue.  Prices, values, or income from any securities or investments mentioned in this report may fall against the interests of the investor and the investor may get back less than the amount invested.  Where an investment is described as being likely to yield income, please note that the amount of income that the investor will receive from such an investment may fluctuate.  Where an investment or security is denominated in a different currency to the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor

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Assumptions, opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.  ETF Global LLC (“ETFG”) and its affiliates and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively ETFG Parties) do not guarantee the accuracy, completeness, adequacy or timeliness of any information, including ratings and rankings and are not responsible for errors and omissions or for the results obtained from the use of such information and ETFG Parties shall have no liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of such information. ETFG PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.  In no event shall ETFG Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the information contained in this document even if advised of the possibility of such damages.

ETFG ratings and rankings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. ETFG ratings and rankings should not be relied on when making any investment or other business decision.  ETFG’s opinions and analyses do not address the suitability of any security.  ETFG does not act as a fiduciary or an investment advisor.  While ETFG has obtained information from sources they believe to be reliable, ETFG does not perform an audit or undertake any duty of due diligence or independent verification of any information it receives.

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