SPDR S&P 500 (SPY)
SPDR DJIA (DIA)
iShares MSCI All Country World Index (ACWI)
Vanguard FTSE All-World ex-U.S. (VEU)
iShares MSCI Eurozone (EZU)
iShares MSCI Japan (EWJ)
iShares MSCI Emerging Markets (EEM)
ACWI and VEU are two global funds (one with U.S. exposure, one without) that have benefited from the rebound in European and Japanese shares and emerging markets.
The British FTSE 100 hit a new 52-week high as well, due to the weaker British pound, which has dipped back near its 52-week lows as the Bank of England steps up quantitative easing.
EEM danced around the $36 level for several weeks, but it finally broke out to $37 per share. There is some resistance ahead, but a rally into the low $40s is now probable as it re-enters its old trading range. The inverse head-and-shoulders pattern which formed from summer 2015 until summer 2016 is complete, and the target price is $42 per share.
The S&P 500 Index, Nasdaq and Russell 2000 made new highs this week, while the Dow Jones Industrial Average remained essentially flat.
As indexes achieve new highs it will be important to look at how broadly the gains are spread. First Trust Nasdaq 100 Equal Weighted (QQEW) has yet to exceed its 2015 high due to the disproportionate influence of large-cap names such as Apple (AAPL) and Microsoft (MSFT).
Fidelity Floating Rate High Income (FFRHX)
DoubleLine Core Fixed Income (DLFNX)
Thompson Bond (THOPX)
Fidelity Corporate Bond (FCBFX)
Fidelity High Income (SPHIX)
Treasury interest rates decreased last week, lifting many bonds. Investment-grade corporate bonds moved higher across the board, while high-yield led following a jump in oil prices.
Sector Performance
The better-than-expected July employment report triggered a slight shift in interest rate expectations, which boosted financials and suppressed utilities.
Subsectors within the financial and technology sectors were strong, with SPDR S&P Regional Banking (KRE) climbing more than 3 percent and iShares PHLX Semiconductor (SOXX) rising nearly 3 percent.
iShares Nasdaq Biotechnology (IBB) pulled back slightly, but remains above its trading range.
SPDR Energy (XLE)
First Trust ISE-Revere Natural Gas (FCG)
Market Vectors Gold Miners (GDX)
Market Vectors Steel (SLX)
Market Vectors Coal (KOL)
Oil prices rebounded to $43 a barrel in the past week, sparking a quick rally. Prices are moving lower again now and another test of $40 is on the way. Gasoline inventories fell over the past week, while crude oil inventories increased.
Steel, coal and gold-related shares all continued in their general uptrend. Chinese coal and steel futures rallied in response to the Chinese government’s plan to slow production in second half of the year.
Matthews India (MINDX)
India has been quietly reforming its economy the past couple of years and took a major step forward with the passage of a constitutional amendment which paves the way for a general sales tax (GST). This will eliminate a labyrinth of local taxes and create a common market in India, which until now has been relatively fractured by decentralization. While these reforms may have little short-term impact, the long-term outlook for the country has improved significantly.
