There was little to no anticipation leading up to the FOMC meeting that concluded today. This lack of attention was apparently for good reason, as the Federal Reserve revealed nothing of any significance in its post-meeting press release. Technology, Momentum, and the Eurozone continue to provide the market leadership for their respective groups in today’s Weekly Edge.
Sectors: Technology, Consumer Discretionary, and Health Care were the only three sectors gaining momentum this past week, and they also happen to be the three top-ranked sectors. Health Care was the big mover, jumping from eighth to third, while Technology and Consumer Discretionary were in the top-two slots a week ago. All ETFs within the Health Care sector posted improvements, but the iShares U.S. Healthcare Providers ETF (IHF) turned in the best results. Vanguard Financials (VFH) was the only other one of the Sector Benchmark ETFs that rose in the rankings, moving two spots higher. Utilities and Telecom both fell two places lower, while many others slipped a notch. Energy was already at the bottom and unable to drop any further on a relative-strength basis. However, Energy fell deeper into the red.
Factors: Similar to the action in sectors, only three of the Factor Benchmark ETFs posted momentum gains over the past week. Momentum, Growth, and Market Cap were the three that gained, and it was enough to allow Market Cap to climb a notch to fourth place, putting it closer to the leaders at the top. Value was the only other factor improving its relative-strength position, and this improvement was the result of High Beta posting the largest momentum decline of the group and falling lower. This puts High Beta in a virtual tie for last place with Yield. Both are now hanging on to their last slivers of positive momentum and face the potential of being in the red by next week.
Global: Unlike the sectors and factors, where only three categories could manage a positive momentum change, all but one of the Global Benchmark ETFs posted improvements. The odd man out is Canada, which extends its stay on the bottom and is now 10 points in the red. Strength in the Eurozone continues to propel international markets, and the iShares MSCI Eurozone ETF (EZU) is heads above the crowd with a momentum score of 45. Broader European ETFs are nearly as impressive, with Vanguard FTSE Europe (VGK) posting a score of 39. EAFE, Emerging Markets, and China occupy the second through fourth positions, just as they did a week ago. The U.K., Pacific ex-Japan, and World Equity are in a three-way tie for the middle ground, leaving the U.S., Latin America, Japan, and Canada in below-average positions. Said another way, the major continents of the Western Hemisphere plus Japan are lagging global markets.
The following Edge Charts are market momentum snapshots. They provide a quick and easy way to help you visually get a handle on the overall state of the market. With these charts, you can assess both the relative strength and absolute strength (momentum) of more than 30 global equity market segments. Please refer to the Edge Chart User’s Guide for further explanation.
Disclosure: Author has no positions in any of the securities mentioned and no positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) is received from, or on behalf of, any of the companies or ETF sponsors mentioned.