Don Dion’s Weekly ETF Winners and Losers
The past week on Wall Street was marked by the start of earnings season and major bellwethers companies such as Alcoa(AA), Intel(INTC) and JPMorgan Chase(JPM) issuing reports that were met with much scrutiny by the market.
Retails sales in December were reported to be worse than expected, and that was taken by the market as an indication of what may happen when retailers report fourth-quarter earnings.
This week also saw the stunning news that Google(GOOG) may exit its search business in China, after announcing that it was frustrated with government censorship there. Google also said that its mail service in China had been attacked by sophisticated cyber hackers last year. The hackers sought to access the email accounts of two Chinese human rights activists, leading to speculation by many that it may have been the Chinese government itself that was responsible.
China was also in the news when the government announced that it would be raising the reserve ratio for banks in an effort to reduce liquidity and prevent asset bubbles in the country.
In commodities, the much anticipated physical platinum ETF that was released Jan. 8 is already a popular fund in its first full week of trading, although it is yet to show much price movement.
ETF assets also passed a landmark this week when the number breached the $1 trillion mark.
Overall, market losses on Friday meant the indices lost ground for the week. The S&P 500 dropped 0.8%, the Nasdaq declined 1.3% and the Dow lost 0.1%.
And here are the winners and losers for the week:
Winners
iShares MSCI Japan(EWJ) +3.5%
WisdomTree Japan Small Cap(DFJ) +3.3%
iShares MSCI Japan Small Cap(SCJ) +2.4%
CurrencyShares Japanese Yen(FXY) +1.9%
Japan ETFs were winners last week thanks to the return from the Japanese yen, as the Nikkei 225 was up only 1.7% for the week.
Claymore/Delta Global Shipping(SEA) +4.1%
Although shares stumbled on Friday along with the broader market, SEA continues its 2010 march to higher ground. Increased economic activity and a phase-out of single hull ships has put upward pressure on the rates charged by the shipping firms that make up SEA, and a Jefferies analyst’s positive comments helped lift the sector.
SEA made the winners list last week and the 2010 cumulative gain is now 16.9%.
iShares Barclays 20+ Year Treasury(TLT) +2.0%
SPDR Barclays Long Term Treasury(TLO) +1.8%
Long-term Treasuries tend to perform well in down markets as investors push down yields, and this week was no exception.
Losers
PowerShares DB Oil(DBO) -5.3%
U.S. Oil(USO) -6.2%
Higher oil inventories knocked crude down a few dollars per barrel, but selling was already under way as oil retreated from a recent high above $80 per barrel and there was no up day during the week.
iShares FTSE/Xinhua China 25(FXI) -5.8%
Claymore/AlphaShares China Real Estate(TAO) -6.6%
Claymore/AlphaShares China Small Cap(HAO) -0.5%
China tightened lending this week and that sent Chinese financial and property shares sharply lower. FXI has about 50% of its portfolio in financials, while HAO has only 13%. HAO has been a steady outperformer this year, however, and there are reasons why it should continue to outperform other broad China ETFs
Market Vectors Solar(KWT) -11.1%
Claymore/MAC Global Solar(TAN) -10.8%
France cut its subsidies to solar power makers and Germany is expected to follow, sending shares of solar makers to the downside. Other cash-strapped governments around the world may eventually make the same policy decision, as they cannot afford to subsidize inefficient technologies in the midst of general funding issues.
The news overshadowed good news from Suntech Power(STP), which said it has already sold out production through the second quarter.
