ETF/No Load Fund Tracker Newsletter For April 22, 2016

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ETF/No Load Fund Tracker StatSheet

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https://theetfbully.com/2016/04/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-04212016/

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Market Commentary

MIXED END TO MIXED WEEK

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

U.S. stocks closed the week mixed Friday as earnings misses last night from Microsoft (MSFT) and Google parent Alphabet (GOOG) gave Wall Street’s optimism a punch in the face. Before the opening bell though, the Dow got a push from strong earnings report from McDonald’s (MCD).

The mediocre finish to the end of the week on Wall Street has some investment pros wondering if the market’s strong run from the lows in early February has run its course while worrying about the recurring theme of the past that April cheers could bring May tears.

We heard a solid earnings report from McDonald’s (MCD) today. The maker of burgers, fries, and breakfast meals posted an earnings beat and rise in same-store sales of 5.4% versus a year ago, boosted by the success of its all-day breakfast initiative.

Despite the market’s two-day relapse, the earnings situation has improved, if you can call it that. With 132 companies in the S&P 500 having reported earnings, the Q1 profit contraction has been decreased to “only” -7.1%, which is better than the nearly -8% estimated drop a few weeks ago. Sure, that should push the major indexes to new highs in a hurry.

Let’s see how the next week of earnings reports will impact markets.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 04/21/2016

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ETF/Mutual Fund Data updated through Thursday, April 21, 2016

TOC040716

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 4/4/2016

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in above chart) has recently crawled above its long term trend line (red) and finally generated a new “Buy” signal effective 11/3/15. The market subsequently dropped, and we exited again on 11/13/15. As of today, the TTI has just moved above its trend line by +1.82%. As of Monday, April 4, 2016 a new Domestic Buy signal became effective as posted on the blog.

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Snapping A 7-Day Winning Streak

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Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Many investors were laying in waiting to see what the ECB’s decision was going to be in regards to raising interest rates. As expected, the ECB stood pat on rates earlier Thursday and began the implementation of its larger asset-purchase program, which now totals 80 billion euros a month. However, President Mario Draghi did not rule out future rate cuts to fight low inflation and stagnant growth in the eurozone.

In earnings news, Microsoft (MSFT) reported a drop in revenue and earnings amidst trying to steer the corporate direction from desktop PCs to the modern age of emerging portable technologies. The tech giant dropped 5% in fiscal Q3 revenue to $20.5 billion and earnings fell from $5 billion to $3.8 billion. Shares dropped 4% on the day.

As I have been anticipating, SunEdison (SUNE) filed for Chapter 11 bankruptcy reorganization today. Foul accounting practices were cited as the reason that the company came under scrutiny over the past year. They also had piled up debt totaling $16 billion in liabilities. The stock is now at $0.34 a share.

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Markets Continue Their Rally; Fast Food And Oil Up

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Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The stock market rally continued modestly here in the U.S. today, driven higher by a rebound in oil prices on negative news and solid earnings reports from international Yum Brands companies.

Yum Brands (YUM), the parent company of fast food giants KFC, Taco Bell and Pizza Hut, handily beat first-quarter earnings expectations, mostly driven by growth in China. The company reported earnings of $391 million for Q1, up 8% from $362 million a year ago. Earnings per share came in 8 cents above estimates at 95 cents a share. The report pushed Yum shares up 4.1% in after-hours trading to $85.95, up $3.42. Increased performance was due to a 42% boost of sales in China, according to CEO Greg Cred.

Wall Street is in the heart of the corporate earnings season. As I have discussed in previous articles here, many analysts were predicting a 7-8% decline. The results, thus far have been slightly better than expectations, but it is nothing to go crazy over. If you simply set the bar low enough, anybody can beat expectations, which is the goal of this earnings season.

Heading into Wednesday’s session, profits for S&P 500 companies have reported contracting 7.5% in Q1. That is bad news, so the markets will likely follow the theme of the last year and move higher…

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Mission Accomplished: S&P 2,100 And Dow 18,000

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Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets are feeling warm and fuzzy after returning to familiar 2015 stomping ground of 18,000 for the Dow and 2,100 for the S&P 500.

As was to be expected, some analysts are now even predicting that the Dow could climb to 18,700 over the next year and a half, largely driven by Goldman Sachs (GS), Apple (AAPL) and UnitedHealth (UNH). Yep, with the total disconnect of the market levels to underlying economic fundamentals, I won’t hold my breath for that to happen.

Crude oil prices advanced today as well, following a drop in the previous session despite a failure by oil-producing nations to agree on limiting output at a weekend meeting in Qatar. Analysts say oil is starting to lose its grip on the stock market as focus shifts back to first-quarter earnings season.

This afternoon we heard another lay-off story but this one was massive with Intel announcing that it was dismissing 11% of its entire workforce, or 12,000 people. I am sure that main stream media (MSM) can spin this into a positive for the economic recovery while the computer driven algos might use this headline to push the indexes to all-time highs.

I am being facetious, of course, but ZeroHedge commented this way:

Confused? Don’t be: it’s all part of the new normal recovery, and don’t forget the spin: don’t think of it as 12,000 highly paid engineers and tech workers fired, think of it as 12,000 brand spanking new waiters and bartenders.

For quite some time, I have been curious to see if there was any correlation between the events of 2008 and what we are experiencing in 2016. Today I lucked out and found this interesting S&P chart, also courtesy of ZeroHedge:

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Dow Conquers 18,000 Level

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Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Despite yesterday’s miserable failure of the OPECers to come to a production limitation agreement, the markets headed north with the S&P climbing to a 4-month high while the Dow managed to close above the 18,000 level, its highest point since last July.

When news of the OPEC failure came out yesterday, oil crashed 7% in the futures market, but managed to rally 8% recovering all losses on… well… no real news other than the next set of speculation that China’s slowdown is easing while central banks are primed to push for more growth.

Helping equities was Fed Pres Dudley when he chimed in that “inflation will firm, and corporate earnings have so far largely topped sharply reduced estimates.” Sure, even JP Morgan’s 52% crash in earnings was good news, since it was better-than-expected.

Speaking of earnings, remember when they used to be the main item that determined stock prices? Well, no more, as this chart from ZeroHedge shows:

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