Fed Holds Steady—Facebook Beats And Rips In After Hours Session

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

As was to be expected, the Fed held interest rates steady for the third consecutive meeting. The FOMC statement was neutral and contained the usual language of “assessing economic and labor conditions, inflationary pressures and expectations along with readings on financial and international developments before determining the size of future interest rate adjustments,” which leaves things wide open to their discretion.

The market’s reaction was slightly bullish but lacking the exuberance of the past, which could indicate that the bull market is getting tired. Although this afternoon, the beaten down Nasdaq received some good news for a change when Facebook (FB) crushed earnings estimates and saw its shares skyrocket by some 9% as of this writing.

Whether this was simply an outlier when it comes to tech world earnings remains to be seen, but I am curious if these numbers are enough to prop up the major indexes, at least for the short term.

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A Mixed Day, But: Apple Tumbles 8% In After Hours Trading; Twitter Crashes 14%

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

It was a fairly quiet day during the regular session despite a host of economic data points that can be summed up with one word: dismal. But none of that matters in a centrally planned economy where fundamentals are immaterial and where Wall Street hangs on to every new utterance by the the masters of the financial universe, namely the Fed.

This was the case today with poor economic data being brushed aside as all eyes are now on the Fed when they release the latest monetary policy statement due out tomorrow around 11:15 PST. A rate hike is not expected but the search for hints as to the timing of the next one will be on everyone’s mind.

This afternoon Twitter got crushed and lost over 14% while Apple disappointed and dropped some 8% as of this writing. At the same time, the FANGs (Facebook, Amazon, Netflix, Google) had their worst 3-day run in almost 3 months. None of this will bode well for the Nasdaq’s opening tomorrow morning. But, I am hopeful that the Fed as usual will come to the rescue…

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Underwhelming Earnings

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks retreated today as investors brace for a barrage of earnings reports, a slew of fresh economic data and the Federal Reserve’s decision Wednesday on interest rates.

The earnings season, according to MSM, has fared well thus far, if you can call beating a bar that has been set extremely low a news-worthy event. Nevertheless, 77% of the 132 companies that have reported earnings have topped these basement expectations. There is no major signal in this earnings season though and investors are still waiting for a confirmation that earnings will increase in the future. Well, I won’t hold my breath for that announcement.

The Fed breaks from its two-day policy meeting Wednesday at 2 p.m. ET and investors around the globe will be watching to see what the U.S. central bank says about the timing of its next interest rate hike. My guess: It won’t happen….

Costco was back in the headlines today, after buzz that annual memberships may increase from $5-10 per member in 2017. The trend has been for the company to raise membership fees every 5-6 years and the last time that fees were raised was back in 2011.  Fees for a Basic Membership are $55 and $110 for Executive Memberships.

In oil news, the prince of Saudi Arabia has laid out a sweeping plan to transform the kingdom from its heavy reliance on oil to a more diverse economy. Among other proposals to boost non-oil revenue, the leader said today that they should invest more in mineral mining and expand the kingdom’s military production. The future impact on oil prices is still TBD.

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ETFs/Mutual Funds On The Cutline – Updated Through 04/22/2016

Ulli ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 381 ETFs, of which currently 330 (last week 283) are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher. Volume figures can change in a hurry, so be sure to check first before investing.

These ETFs are generated from my selected list of 98 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. 83 ETFs (last week 67) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 433 (last week 350) above the line and 347 below it out of the 780 that I follow.

Take a look:

  1. ETF Master Cutline Report
  2. ETF High Volume Cutline Report
  3. MF 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.

One Man’s Opinion: “I’m Not Really Sure How Much More Of This I Can Take”

Ulli Market Review Contact

Submitted by Albert Edwards via ZeroHedge

Man

Earlier this week we described the personal come to non-GAAP Jesus moment of trading commentator Richard Breslow, who confessed in no uncertain terms that he has had it with endless central banking intervention: “a portfolio built to only withstand stress thanks to central bank intervention is one destined to blow-up spectacularly. The embedded flaw in this new logic is that central banks give investors perfect foresight. And nothing can go wrong… You don’t need to be a Taleb or Mandelbrot to calculate that we have been having once in a hundred year events on a regular basis for the last thirty years.”

Today it is another famous skeptic, SocGen’s Albert Edwards who has had enough and says he feels “utterly depressed” because he has not “one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions and that political chaos will be the ugly result. The only people who will benefit are not investors, but anarchists who will embrace with delight the resulting chaos these policies will bring!”

As he openly warns his readers:

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New ETFs On The Block: Principal Shareholder Yield Index ETF (PY)

Ulli Uncategorized Contact

InvestingPrincipal Financial, the Iowa-based retirement and mutual funds specialist, recently expanded its exchange-traded fund offerings with the launch of two new so-called smart-beta funds. Principal is one of the biggest asset managers in the US, yet it was largely missing from the ETF landscape with just one actively-managed product to its name.

The Principal Shareholder Yield Index ETF (PY) targets US companies that return value to shareholders. The passively managed PY tries to reflect the performance of the Nasdaq US Shareholder Yield Index, which in turn, is a subset of mid– and large capitalization US companies within the broader Nasdaq US Large Mid Cap Index. Shareholder yield is a measure that quantifies the amount of cash returned to shareholders through buybacks, dividends and debt reduction.

The three components of the so-called ‘shareholder yield’ is a good metric of shareholder friendliness and the new fund is the only product that targets all the three factors. Most funds focus on one component, such as buybacks or dividends, but not both. PY’s investment strategy helps investors target companies that have the ability to support share prices through buybacks and have a history of dividend growth and debt reduction.

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