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And The Resilience Continues…


Markets soared as last week came to a close, should we expect similar trends this week?

France wins World Cup and President Trump meets with Putin with global trade and security at the forefront.

It seems like the broad-based indices will continue to play to the same tune: onward and upward!

Monday, July 16, 2018 - The Markets are still proving skeptics wrong time and time again as they continue their march upwards outlasting political noise that would seem to only have a negative effect on them. The latest news that they have shrugged off is the additional tariffs that President Trump would like to levy on China for $200B worth of goods. Yes, there was a bit of a shock wave mid-week when the President announced the news, but it didn’t stop the Dow Jones Industrial Average from gaining 2.3%, the S&P 500 from gaining 1.5% and the Nasdaq Composite from reaching levels over 7800.

In ETFs, during the first 15 days of the quarter, we have seen outflows in some of the largest products on the market such as SPY that has lost about 1.54% or over $4B. The iShares Emerging Markets ETF, EEM has seen redemptions top $3.25B in the month of July which makes up over 7% of its AUM and the Vanguard High Dividend Yield ETF, VYM lost over $3.2B or about 13% of its AUM, all according to the ETFG Fund Flow Summary.

In July, we have seen the greatest inflows into fixed income products. The chart toppers were the iShares iBoxx Investment Grade Corporate Bond ETF, LQD which gained about $1.82B of inflows and the Vanguard Short-Term Bond ETF, BSV which added $1.14B to its AUM.

In our weekly Quant Movers, we saw technology-based ETFs take the biggest losses. These included the iShares North American Tech ETF, IGM and the Invesco NASDAQ Internet ETF, PNQI which lost 8.39 and 7.89 to their overall scores respectively.

In the winners column, we saw a broad variety of products add points to their overall scores. These included the Alerian MLP Infrastructure Index ETN, MLPB, the Vanguard FTSE Developed Markets ETF, VEA and the Franklin LibertyQ Emerging Markets ETF, FLQE which gained 14.99, 9.66 and 8.67 points to their overall Quant Scores.

As the 3rd quarter continues to play out, it will be interesting to see if the trade war talks, North Korea/ Russian news or the new types of relationships we are developing with our closest allies actually play a long term effect on the markets. Until then, it seems like the broad-based indices will continue to play to the same tune: onward and upward!

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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