Historically, September tends to be the worst month for stocks. Add the chaos caused by Harvey and Irma, and the market could be looking at a rocky start to autumn.
As Irma heads toward Florida, investors seem to be moving to more secure investments, as evidenced by the rise in gold prices and the fortification of U.S Treasurys. According to MarketWatch, efforts to reinvest and rebuild could lead to bumps in retail and consumer sectors down the line, but like the many residents affected by these recent storms, the market may be facing unknown consequences from the fallout for some time.
Sectors: The leading Sector Benchmark ETFs exhibited positive shifts over the past week. Health Care and Materials rose, and Financials fell significantly. Momentum scores of most sectors increased for the week. The exceptions were Utilities, Telecom, and Financials. Financials fell into the red. The spread between the highest and lowest decreased from 48 to 35. In terms of ranking organization, there appears to be no general trend between cyclicals and defensive sectors. Technology (a highly cyclical sector), which decreased slightly, performed the same as Utilities (a typically defensive sector). Industrials and Discretionary were the only sectors to change from negative to positive for the week. A mostly positive increase in momentum for most sectors suggests the potential for a market increase.
Health Care (+11), Materials (+7), Discretionary (+8), and several other sectors increased their momentum last week, while Energy and Financials are at the bottom of the sector rankings. The economy is recovering from the effects of Hurricane Harvey, but Hurricane Irma soon approaches.
There are some specific concerns for certain sectors that may be affecting their rank. A need for oil refineries, especially in Houston, has affected the Energy sector, which has increased from -25 to -14.
Factors: The leading Factor Benchmark ETFs all had positive results for the week. Momentum and Growth were the top-ranked factors, while High Beta and Value are at the bottom. Risk-off factors such as Quality, Yield, and Low Volatility were dispersed. Quality was in the center, Yield was lower, and Low Volatility was toward the top. The overall momentum ranking for all factors increased dramatically last week, with the average momentum score changing from 2.3 to 5.7. The spread lowered from 25 to 19.
Global: Rankings in the leading Global Benchmark ETFs were mixed last week. Latin America and China are tied for the lead in the rankings. Overall momentum scores have risen for the week. Developed countries climbed the most, with USA increasing from 3 to 8, while emerging markets decreased from 29 to 28. The average momentum score globally increased from 17.5 to 18.3. The UK and Japan were at the bottom in terms of absolute rank. Developed markets seem to be on the rise for the week, as Canada also increased from 12 to 16.
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