Market’s Honeymoon Glow From Trump-onomics

Posted on Posted in Views From The Hill

By J Clinton Hill, Capital Markets Strategist @ Hillbent.com

ETF Market Commentary

View from the Hill, stocks, bonds, cash, commodities, real estate, volatilityBefore sharing a View From the Hill on the ETF landscape, let’s start with some key economic data points. Despite fresh PMI Composite data of Europe indicating that the region and two of its largest economies, Germany and France, are experiencing a recovery, Europe (VGK) continues to significantly lag U.S. equities. Of course, a hat tip is most appropriate for the US Dollar Index (UUP), as it is partly to blame.

The extended honeymoon of euphoria and boost in Consumer Confidence about future U.S. economic prospects after Trump’s victory have yet to wane. With Unemployment Claims at historical lows, a and a surprisingly strong Durable Goods report, some of the market’s advance is based on reality and not just fantasy.

The small cap index, Russell 2000 (IWM), has now advanced for 14 straight days and steadily making new highs. Most of the index’s components are somewhat insulated from the effects of a stronger dollar as they have less exposure to international currency risk. With that said, even though the SP-500 (SPY) and DJ-30 Industrials (DIA) continue to trend upward, they are now showing some signs of buyer fatigue. To illustrate this point, more than 80% of the SP-500 stocks traded on less than average volume. The tech-heavy Nasdaq-100 (QQQ) diverged from its U.S. counterparts and closed in negative territory with 70% of its components trading on less than average daily volume. Volatility has become extremely cheap and for those looking to protect profits or speculate on a market reversal, there is the VIX (VXX).

I think ending commentary at this point is appropriate. Please refer to our ETF summary table below for a performance analysis of asset classes. Until next time, Happy Thanksgiving to all and enjoy the market’s honeymoon glow from Trump-onomics before it fades.

Signing off @ Hillbent…

 


View From the Hill ETF Performance

 

RS 1Yr Exchange Traded Fund Last Chg % Chg
  Equities
100 DJ-30 Industrials (DIA) 190.59 0.57 0.30%
100 SP-500 (SPY) 220.70 0.12 0.05%
95 Nasdaq-100 (QQQ) 118.42 -0.48 -0.40%
100 Russell-2k (IWM) 133.63 0.83 0.63%
55 EAFE (EFA) 56.62 -0.20 -0.35%
70 Emerging Mkts (EEM) 35.08 -0.38 -1.07%
33 Europe FTSE (VGK) 45.70 -0.33 -0.72%
74 Latin America 40 (ILF) 28.11 -0.11 -0.39%
78 Brazil (EWZ) 33.81 -0.36 -1.05%
6 Japan (EWJ) 49.91 0.00 0.00%
85 Pacific Ex-Japan (EPP) 41.04 0.21 0.51%
78 FTSE China 25 (FXI) 36.74 -0.14 -0.38%
23 VIX Short-Term Futures (VXX) 27.98 0.07 0.25%
     
  Major Equity Sectors  
100 Consumer Discretionary (XLY) 82.78 0.08 0.10%
40 Consumer Staples (XLP) 50.82 -0.28 -0.55%
99 Energy (XLE) 73.08 0.30 0.41%
58 Financials (XLF) 22.38 0.13 0.58%
49 Healthcare (XLV) 69.21 0.27 0.39%
100 Industrials (XLI) 62.37 0.46 0.74%
99 Materials (XLB) 49.41 0.22 0.45%
25 Real Estate (XLRE) 29.93 -0.21 -0.70%
98 Technology / Info (VGT) 121.30 -0.43 -0.35%
75 Telecom (IYZ) 32.30 0.11 0.34%
43 Utilities (XLU) 46.49 -0.47 -1.00%
     
  Bonds & Fixed Income  
7 20+ Yr Treasury (TLT) 120.64 -0.47 -0.39%
10 Aggregate Bond Fund (AGG) 108.18 -0.38 -0.35%
51 Treasury Inflation Protection (TIP) 113.31 -0.38 -0.33%
33 Investop Corp Bond (LQD) 116.58 -0.43 -0.37%
84 High Yield Corp Bond (HYG) 85.62 -0.32 -0.37%
4 Pimco Intermed Muni Bonds (MUNI) 52.67 0.00 0.00%
3 High Yield Muni (HYD) 29.21 -0.21 -0.71%
     
  Currencies  
98 US Dollar Bullish (UUP) 26.29 0.16 0.61%
2 Euro Trust (FXE) 102.56 -0.70 -0.68%
40 Japanese Yen Trust (FXY) 85.72 -1.14 -1.31%
     
  Commodities  
88 DB Commodity Index (DBC) 15.12 0.06 0.40%
42 Gold (GLD) 113.25 -2.29 -1.98%
51 US Oil (USO) 10.67 0.04 0.38%
     
  Real Estate  
43 DJ Real Estate (IYR) 74.54 -0.41 -0.55%
74 DJ Home Construction (ITB) 27.79 0.17 0.62%
25 Residential Real Estate Index (REZ) 58.76 -0.33 -0.56%

 

Signing off @ Hillbent…

 

(For more a more detailed and extensive coverage of ETFs, please refer to our premium research service, ETF LookOut Points.)

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