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Chinese New Year: Weekly Update and Sector ETF Performance

While it is no secret that New Years optimism and resolve has a tendency to fade to “would have, could have, should have” before even the kickoff of the Super Bowl; the start to the new market year would make even the worst procrastinator blush.

According to Bloomberg  U.S. stock markets had “their worst weekly declines in more than four years” with the Dow Jones average having its worst opening five days to start a year, ever.

The catalyst was the markets in China, or more specifically the plight of the Chinese Yuan. Before Wall Street even had a chance to start the year, traders arrived Monday morning to the news that the Chinese market had suspended trading after a decline of nearly 7%.

At that point the rout was on.

In a replay of events that triggered nasty selloffs in global markets last August, once again the Peoples Bank of China (PBOC) was forced to devalue the Yuan more than expected. A report surfaced midweek that suggested (dare I say leaked) the possibility of PBOC officials devaluing as much as 15% versus the U.S. Dollar.  On Thursday makeshift Chinese market circuit breakers which kicked in at a 7% decline were triggered again, only this time took just forty-five minutes before trading was halted the rest of the day.

Oil prices continued a downward slide and finished the week below the $33 level.

Outside of fixed income and forex the only positive returns of ETFs tracked by BIA were Gold (GLD) up 4.9%, Silver (SLV) up 3.36% and the gold mining and junior mining ETFs gaining 8.45% and 7.5% respectively.

Sunday evening all eyes will again be focused on the opening of Asian and Chinese markets.

Wednesday’s economic news will bring the crude oil inventories report along with the Federal Reserve Beige Book report.

On the earnings front keep an eye out on financial behemoths JP Morgan on Wednesday and Citigroup Thursday as it is always interesting to listen for comments or potential nuggets regarding exposure to market turmoil going forward even if said turmoil picked up after the reporting period concluded.

BIA Tracked ETF Performance week of January 4, 2016
2016 2015
S&P500 SPY -5.86% 1.24%
Dow Jones DIA -6.18% 0.09%
Nasdaq 100 QQQ -7.02% 9.43%
S&P Midcap MDY -6.35% -2.51%
Rusell 2000 IWM -7.79% -4.48%
Dow Transports IYT -7.62% -16.92%
10 yr Treasury Yield ^TNX  2.13% 2.27%
30yr Treusury Yield ^TYX  2.93%
MSCI – International EFA -6.45% -0.99%
Japan EWJ -5.61% 9.19%
Currency Hedged Japan HEWJ -7.95% 9.65%
Europe VGK -6.28% -1.95%
Curreny Hedged Europe HEDJ -7.12% 5.78%
Germany EWG -7.25% -2.78%
Euro FXE 0.46% -10.69%
Yen FXY 2.28% -0.71%
Emerging Market VWO -8.28% -15.83%
Currency Hedged Emerging Mkt HEEM -6.55% -10.07%
Aggregate Bond AGG 0.62% 0.48%
Short Term Treasury SHY 0.24% 0.43%
3-7 yr Tsy IEI 0.97% 1.63%
7-10 yr Tsy IEF 1.48% 1.51%
20 yr Tsy TLT 2.31% -1.79%
Inflation Protected TSY TIP 0.65% -1.76%
Short Term Municipal SHM 0.08% 1.20%
Municipal MUB 0.53% 2.91%
Municipal TFI 0.94% 3.39%
Investment Grade Corp LQD 0.55% -1.26%
1-3 yr corporate CSJ 0.13% 0.63%
Hi Yield JNK -1.27% -6.76%
Gold GLD 4.16% -10.67%
Gold Miners GDX 8.45%
Junior Gold Miners GDXJ 7.50%
Silver SLV 3.26%
Hard Asset HAP -6.07% -19.89%
Agriculture MOO -5.83% -8.91%
Energy XLE -7.08% -21.50%
Financials XLF -7.26% -1.77%
Natural Resources IGE -7.18% -24.56%
Utilities XLU -0.39% -4.92%
Materials XLB -7.74% -8.69%
Consumer Staples XLP -2.91% 6.88%
Consumer Discretionary XLY -5.82% 9.90%
Healthcare XLV -5.57% 6.84%
Industrial XLI -6.21% -4.33%
Metals & Miners XME -7.42% -50.53%
REITs (Real Estate Inv Trsts) VNQ -2.85% 2.43%
MLPs (Mastr Lmtd Prt) AMLP -8.80% -27.32%
China FXI -10.40% -12.91%
China A shares ASHR -13.76%
Hong Kong EWH -7.01% -1.20%
Brazil EWZ -7.69% -41.45%
Russia RSX -9.01% 3.75%
India EPI -5.19% -8.90%

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DISCLAIMER: Nothing in this article should be construed as a personal recommendation or advice. Nor should anything in this article be construed as an offer, or a solicitation of an offer, to sell or buy any investment security. Barnhart Investment Advisory Principal and clients may hold positions in securities mentioned above, and subject to change without notice. Consult your investment professional before investing.

Data retrieved from Yahoo Finance, Barnhart Investment Advisory makes no representation and/or guarantee as to accuracy.


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