ETF/No Load Fund Tracker StatSheet
————————————————————-
THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:
————————————————————
Market Commentary
Friday, February 1, 2013
DOW TOPS 14,000 ON JOBS DATA; EUROPE RISES AS US RECOVERY ALLEGEDLY GAINS TRACTION
US stocks rallied Friday with the Dow Industrials closing above 14,000 for the first time since 2007 after upbeat reports on the labor market and manufacturing boosted investor confidence in the world’s largest economy.
Markets surged after a Labor Department report showed the economy added 157,000 jobs in January following a revised 196,000 gain in the previous month and a 247,000 spike in November. The revisions revealed the economy added 335,000 more jobs than originally reported. Though the January reading fell short of the 180,000 rise projected by economists, investors were encouraged by the fairly healthy 181,000 per month addition in 2012. Unemployment rate, however, ticked higher to 7.9 percent in January from 7.8 percent in the previous month.
Separately, the Institute for Supply Management’s manufacturing index rose to a nine-month high of 53.1 in January, topping estimates of 50.5, in a sign that manufacturing is on the path to recovery.
The University of Michigan/Thomson Reuters monthly index of consumer confidence rose to 73.8 in January from 72.9 in the previous month. Economists were expecting a reading of 71.4.
A Commerce Department report showed construction spending rose 0.9 percent in December, coming in well above expectations.
The Dow Jones Industrial Average (DJIA) zoomed 149 points to 14,010, up 0.8 percent over last Friday and capping its fifth straight week of gains. The S&P 500 Index (SPX) rose 15 points to 1,513, with all the 10 business groups within the benchmark index advancing for the day. Telecommunications led today’s gains while the index added 0.7 percent for the week.
Treasuries slipped Friday, pushing yields to nine-month highs after a Labor Department report showed the US economy added more jobs than previously estimated, adding to signs the economic recovery is gaining traction.
Most European stocks posted solid gains on Friday though equity averages slumped to their biggest weekly decline this year after a report earlier in the week showed the US economy shrank unexpectedly in the fourth quarter and Spain’s regulator’s lifted a ban on shorting equities.
Data from the eurozone showed unemployment rate remained unchanged at 11.7 percent in December while it was revised down to 11.7 percent from 11.8 percent for November.
Separately, a report showed manufacturing in the currency union contracted at its slowest pace in 11 months in January. Markit’s final PMI reading rose to 47.9 from 46.1 in December. Reading below 50 indicates contraction.
Trend wise, our Trend Tracking Indexes (TTIs) followed the markets and ended the week as follows:
Domestic TTI: +3.10% (last week +3.21%)
International TTI: +11.94% (last week +11.52%)
Again, with the Fed having both hands on the print button to generate some $85 billion of new money every month, some of it is bound to find its way into the stock market. How long this can go on considering the total disconnect from fundamentals is anyone’s guess, but it behooves to be prepared to exit should this rampage come to an end all of a sudden.
Have a great week.
Ulli…
————————————————————-
READER Q & A FOR THE WEEK
All Reader Q & A’s are listed at our web site!
Check it out at:
http://www.successful-investment.com/q&a.php
A note from reader Don:
Q: Ulli: Considering the Fed’s current monetary policy, when would be the appropriate time to consider investing in a Bear ETF like TBF ProShares Short 20+ Year Treasury?
A: Don: A good time would be once TBF breaks above its long-term trend line to the upside, which it recently did. If you are an aggressive investor, you can look for some limited exposure, but use a trailing sell stop.
The Fed’s policies call for continued lower interest rates, and TBFs move could be just a dead cat bounce. That would also be true in case equities take a dive, which they will but the timing of it is totally up in the air.
———————————————————-
WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?
Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:
https://theetfbully.com/personal-investment-management/
———————————————————
Back issues of the ETF/No Load Fund Tracker are available on the web at:
https://theetfbully.com/newsletter-archives/
Contact Ulli