Equities Fall Ahead Of Inauguration

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

It was a mixed bag with upbeat economic news not being able to offset the anxiety about tomorrow’s inauguration. Besides sinking equities, bonds and gold dropped as well while the US dollar and crude oil bucked the trend and closed up.

On the economic front, housing starts rose but building permits inched slightly lower. Weekly initial jobless claims declined by 15k to 234k last week, which was below forecasts of 254k.

With the elite meeting in Davos, Switzerland, being in full swing, I saw this story confirming what I have been saying for a long time that all markets are manipulated by central banks. In this almost humorous article, China orders no market selloffs during President’s Davos trip:

State-owned investors bought shares to steady the market on Monday, while some funds were guided on Tuesday not to sell holdings with big weightings in benchmark indexes, the people said, asking not to be identified because they aren’t authorized to discuss the matter publicly. China’s securities regulators asked funds and brokerages to trade prudently this week and directed exchanges to report any abnormal transactions, the people said.

To be sure, Chinese authorities have traditionally intervened in markets before and during events of political significance, with government funds stepping in to boost stocks before a key meeting of the National People’s Congress last year and before a 2015 military parade celebrating the 70th anniversary of the World War II victory over Japan.

This is simply another confirmation that market manipulation is alive and well.

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Financials Provide A Last Minute Boost

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

It’s been no secret that the post-election rally hit a speed bump with the S&P 500 having moved within a 4 point range, on a closing basis, for the past 2 weeks. Anxiety continues to prevail as to whether Trump can really deliver on his campaign promises.

Retail shares were the anchor weighing on the S&P and Nasdaq early on but the financials (+0.8%) proved to be the savior of the day pushing the indexes up late in the session. Giving the assist was Fed chair Yellen opining in a speech that it “makes sense” to gradually lift interest rates. However, the Dow closed at 2017 lows pulled down by Healthcare and telecommunications.

The higher rates theme shifted things into reverse with the dollar rallying, after taking a drubbing over the past few days, while the winner year-to-date, gold, retreated. Bonds closed lower as interest rates rose. I expect this sideways pattern to continue until Trump has been inaugurated this Friday. Next week, with the election soap opera finally behind us, we may hopefully see better directional clues for the market. The big unknown is whether it will be up or down.

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Indexes Slip On Trump And Brexit Uncertainty

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

Uncertainty gripped the markets as remarks from President-elect Trump about the dollar being too strong pulled the starch out of any upside momentum, and the major indexes spent the session below their unchanged lines with the S&P 500 losing a modest -0.30%.

Not helping equities were remarks from U.K. Prime Minister May detailing Brexit plans, which sparked a huge rally in the British Pound. As the Dollar weakened, interest rates pulled back with the 20+ year T-Bond ETF (TLT) rallying +1.05%, which in turn put pressure on the Financials (IYF), which dropped -1.55% for the day. Even better-than-expected quarterly earnings from Morgan Stanley (MS) could not stem the slide.

The clear winner of the day was gold, which gained $19.40, or 1.62%, breaking back above the $1,200 level. This post-election equity rally was in part based on the surging dollar, which moved very much in sync with the S&P 500. And then this happened:

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One Man’s Opinion: The Equation That Explains It All

Ulli Market Review Contact

OneMan'sOpinionAuthored by Mark St.Cyr,

If you were just woken from some form of suspended animation from let’s say 2010 (ancient economic history in today’s terms) then informed of the current state of global political affairs and upheavals, U.S. employment (95+million not,) global currency gyrations, interest rates at not only 0% but some -0%, threats of escalating wars, threats of major confrontational war, GDP of the major global economies not only contracting, but below statistical stagnant, governments, as well as central banks with balance sheets of debt calculated in $TRILLIONS, some in the 10’s of, all financed at near or below 0%, and the Fed is only about a week away from raising rates into the teeth of what can only be called “uncertainty,” and much, much more. (There isn’t enough time, or digital ink to list them all.)

Nobody would be surprised if your first reaction based on your prior acumen (the ancient history of 7 years ago whether it be in stocks, business, or both) would to become immediately concerned that whatever portfolio, or wealth you may have had in the markets, may be worth far less today than when you were first put to sleep. And probably becoming ever smaller as you thought about what you might need to do next in order to preserve any that may be left.

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ETFs On The Cutline – Updated Through 01/13/2017

Ulli ETFs on the Cutline Contact

Below please find the latest High Volume ETFs Cutline report, which shows how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs are positioned.

This report covers the HV ETF Master List from Thursday’s StatSheet and includes 366 High Volume ETFs ETFs, defined as those with an average daily volume of more than $5 million, of which currently 237 (last week 234) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line from those that have dropped below it.

Take a look:

The HV ETF Master Cutline Report            

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

If you missed the original post about the Cutline approach, you can read it here.

ETF Tracker Newsletter For January 13, 2017

Ulli ETF Tracker Contact

ETF Tracker StatSheet

https://theetfbully.com/2017/01/weekly-statsheet-for-the-etf-tracker-newsletter-updated-through-01122017/

Banks Pumped And Dumped

Fri pic

[Chart courtesy of MarketWatch.com]
  1. Moving the Markets

Facebook’s 1.36% gain, the result of a stock upgrade by Raymond James, helped push the Nasdaq into record territory; the Dow faded below the unchanged line, and the S&P 500 managed to inch +0.18% higher for the day but gave back -0.1% for the week.

The major banks kicked off earnings season with good results with shares initially surging. The trend reversed later in the session, as banks stocks dumped but managed to end up on the plus side for the day with Wells Fargo closing +1.36% higher while JP Morgan added +0.53%.

The Dow’s tiny dip was caused by heavyweight Wal Mart along with other consumer stocks ending to the downside after reports showed that retail sales increased less than expected during the Holiday season.

According to Reuters, the S&P 500 is trading at 17 times expected earnings which, compared to its 10-year average of 14, leaves plenty of room for a pullback should the Trump euphoria wear thin over the next few weeks. Nevertheless, with the markets being manipulated, and no longer being dependent on fundamentals, I expect another attempt being made at Dow 20k next week before inauguration day on January 20th.

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