One Man’s Opinion: Does The Market Indicate There’s A US Growth Problem?

Ulli Market Review Contact

ManThe overall pessimism about the US economy has not subsided as nominal GDP growth has been less than three percent, Q4-over-Q4 , and in that kind of world, corporate profits don’t grow very much, said Joe Lavorgna, chief US economist at Deutsche Bank.

People are focused on the labor market, which is a backward looking indicator; companies hired people, but unfortunately as they did that, the bottom dropped out so to speak, especially in manufacturing. It’s likely things will continue to slow, he noted.

The latest retail sales and unemployment reading came in stronger than anticipated. Asked to comment, Joe said retail sales numbers for the past three months are up three percent annualized, which is not a good number, especially given how low energy costs are and how much job growth the economy had.

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New ETFs On The Block: Reality Shares DIVCON Leaders Dividend ETF (LEAD)

Ulli Dividend ETFs Contact

InvestingAmid stock market turbulence and forecasts for a global slowdown, dividend ETFs look attractive to certain investors, particularly to those who are looking to park their money in relatively stable instruments. Besides the general attraction for quality dividend payers, investors also welcome the regular current income and some protection to capital gains offered by dividend stocks.

While 2015 witnessed solid dividend growth, many analysts forecast a difficult year for 2016. Financial data firm Markit predicts dividend growth to fall 5 percent on a constant currency basis, nearly half the 9.3 percent average growth witnessed in the previous four years.

That means investors need to be selective when picking dividend payers. The newly launched Reality Shares DIVCON Leaders Dividend ETF (LEAD) could be a natural choice in easing the stock picking pain.

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ETF/No Load Fund Tracker Newsletter For February 19, 2016

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ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2016/02/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-02182016/

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Market Commentary

FLAT ON WALL STREET TODAY BUT UP FOR THE WEEK

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks, perhaps a little winded by a massive rally earlier in the week, turned in an uninspiring showing today as investors reacted to softer oil prices and digested a fresh reading on inflation at the consumer level that could influence interest rate policy.

Despite the snoozer of a finish, all three market measures posted their biggest weekly gains yet in 2016. As the chart shows, the Dow gained 2.62% in the holiday-shortened week, the S&P rose 2.85% and the Nasdaq jumped 3.84%. The shorts have all been squeezed to cover, so we’ll have to see if there is another driver to continue the current upswing. My guess is that we’ll run out of steam pretty quickly, especially if oil heads south again.

In economic news, the January consumer price index, or CPI, was unchanged, a tad better than the 0.1% drop economists had forecast. The so-called core CPI, which strips out food and energy costs, rose a bigger-than-expected 0.3%, or a year-over-year pace of 2.2%. The stronger inflation reading could have implications for Federal Reserve interest rate policy, as a big reason the nation’s central bank has been holding off on more interest rate hikes is due to still-weak inflation readings.

Also today, tech investors were reacting to news that the board of troubled Internet Company Yahoo (YHOO) has formed an independent committee to explore “strategic alternatives,” which in Wall Street-speak normally means a potential sale may be in the works.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 02/18/2016

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, February 18, 2016

TOC010716

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

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: SELL — since 11/13/2015

2016-02-18_19-17-54

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 remains below its trend line by -2.20%, which means we are in cash on the sidelines.

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Win Streak Snaps But Gold Muscles Higher

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks fell, capping the Dow’s winning streak at three days as continued volatility in oil prices was offset by a lowered sales outlook from retail giant and Dow component Walmart.

For the past three sessions, the market has been volatile like it has been for most of 2016. The only difference is the recent wild swings have been to the upside, with the Dow enjoying gains of 314, 223 and 257 points the past three sessions since hitting a bottom last Thursday. For the S&P 500 there is overhead resistance lurking around the 1,950 area, so we’ll have to wait and see if this glass ceiling holds and acts as a reversal point or if we’re able to break through it.

Some have called this rebound a “garbage” stock market rally as fundamentals are not in sync with higher prices and predominantly short covering, which I have alluded to, has produced the power for this upswing. Only time will tell if this was one big head fake or the resumption of the bullish trend.

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Short Covering Continues As Stocks Mount Three Day Win Streak On Oil Surge

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

At its low point just a few days ago, the Dow was down about 1,800 points (or 10%) for the year. However, over the past three trading sessions, it has regained over 750 points. Whether the rally marks the end of a painful correction is still to be determined though.

One of the big movers continues to be crude oil. The recent news of a potential cap proposed by Saudi Arabia, Russia and other nations has given a lift to oil prices. And while there’s no guarantee that a deal will be sealed, it is still a sign that the recent oil crash could now be playing out in favor of the markets.

It is all adding up to nothing but a “relief rally” that has slashed the Dow’s losses in half this year. And if the trend continues the bearish spell over on Wall Street may be limited, although I doubt it. If this all very confusing to you, ZH explained it this way:

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