One Man’s Opinion: Will Reallocation To US Equities From Europe And Asia Drive Valuations?

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ManThe S&P 500 index is likely to hit 2250 by the end of the year though it may seem too bullish right now, said Julian Emanuel, US equity and derivatives strategist at UBS.

There has not been a bear market in the past 25 years without a recession and the economy is simply too strong now whether it is jobs, housing or confidence, he noted.

A bear market not necessarily means a 20 percent slump; the index may just stagnate and refuse to move up. Asked if that could be a possibility, Julian answered in affirmative.

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New ETFs On The Block: Global X SuperDividend Alternatives ETF (ALTY)

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InvestingThe revised gross domestic product data that showed the US economy grew at a robust 3.7 percent in the second quarter certainly strengthens the case for a rate hike by the Federal Reserve when it meets next on July 16-17.

However, most market observers believe the interest rate path would be measured and gradual, and would be strictly based on the economy’s macro data. In other words, short-term interest rates would still be low and nowhere close to what is considered as “normal.”

Needless to say, investors looking for income probably have to wait a little longer before cash flows from income generating funds turn steady. Maybe not with the debut of the Global X SuperDividend Alternatives ETF (ALTY). The new fund is Global X’s sixth addition to its “super dividend” series that covers nearly everything from emerging markets to preferred stocks.

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ETF/No Load Fund Tracker Newsletter For September 4, 2015

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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/2015/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09032015/

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Market Commentary

INDEXES CONTINUE SLIDING INTO HOLIDAY WEEKEND

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks tumbled on Wall Street as investors reacted to the August jobs report released today. This report is the last monthly employment picture we will receive before the Fed’s key mid-September meeting on interest rates. The report was lackluster, indicating that the U.S. produced less new jobs than expected, but on the flip-side was the lowest reading on the nation’s unemployment rate in more than seven years.

The downturn Friday capped off an ugly week for the markets in which the Dow plunged 3.3%, the S&P 500 fell 3.4% and the Nasdaq lost 2.7%. As bad as the week was, it didn’t come close to what happened just two weeks earlier when the Dow and S&P skidded 5.8% and the Nasdaq tumbled 6.8%.

Reports are saying that today’s reaction suggests investors are betting that the Fed could move to hike rates in two weeks, despite the fact the mixed report provides reason for both a hike and a delay.

Markets will take a breather on Monday to celebrate the Labor Day holiday. It will be interesting to see how the major indexes fare once traders get back in gear come Tuesday morning.

It was another one of those days with no survivors as all of our 10 ETFs in the Spotlight hit the skids and closed lower. It sure felt good to be on the sidelines. Leading the charge to the downside was the Global 100 ETF (IOO) with -2.02%. Holding up best was Consumer Discretionaries (XLY) with only a -1.07% loss.

We remain in bear market territory as section 3 below shows.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 09/03/2015

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ETF/Mutual Fund Data updated through Thursday, September 3, 2015

TOC 090315

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 8/24/2015

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a “Sell” for this arena effective 10/14/2014, which was followed by a violent break back above the line on 10/22/14 generating a new “Buy.” It was a classic whipsaw signal, and you can read more on my blog as to the events as they were unfolding.

As of today, our TTI (green line in above chart) is positioned below its long term trend line (red) by -2.22% after having generated a “Sell” signal as of 8/24/2015, which applies to all “broadly diversified domestic equity ETFs/Mutual Funds.”

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Early Rally Fades; Dow Up Nasdaq Down

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities closed mixed today as an early rally on Wall Street slowly faded and gave back strong gains. Stocks jumped early in the trading session after yesterday’s big rebound, as Wall Street digested favorable data on the services sector of the U.S. economy and reassuring comments from the European Central Bank. It seems though that investors are remaining cautious in anticipation of a key reading on U.S. employment that will be released tomorrow.

A lot is riding on this employment report, as a very strong report could give the Fed further ammunition to raise short-term interest rates for the first time in nearly a decade. Despite warnings from the IMF that the Fed should hold off on hiking rates, a continuation of good economic data in the U.S. will make the Fed’s decision that much more difficult.

In the tech world, Apple (AAPL) fans and investors both are gearing up for an Apple product unveiling next week. Most speculate that the unveiling will entail a new iPhone model, possible the 6S and 6S Plus. According to FactSet, analysts expect Apple will sell about 235 million iPhones in its upcoming fiscal year, which starts in October, up from 231 million in the prior year.

As you know, according to my Trend Tracking Indicators (TTIs), we are stuck in bear market territory and therefore positioned safely on the the sidelines. There are a variety of ways to determine a bear market and, one of my favorite writers, David Stockman, makes a case that “This Is Not A Retest—It’s A Live Bear!” It’s a great read.

9 of our 10 ETFs in the Spotlight were able to post gains in light of this roller coaster day. Taking top billing was Consumer Staples (XLP) with +0.68% while Healthcare (XLV) lagged with -0.71%.

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Dow Swings Back Into The Black

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

A tech rally today helped Wall Street stage a rebound that sent the Dow up almost 300 points and pushed the Nasdaq back into positive territory for the year. The rally was broad-based as all ten of the S&P 500 sectors rose with technology and industrials leading the way.

Investors were encouraged by several positive economic reports released Wednesday that provided evidence that the U.S. economy continues to churn along despite fears of an economic slowdown in China. Businesses added 190,000 jobs in August, according to payroll processor ADP. The private sector survey provided a preview of Friday’s government employment report on public and private employers, which is predicted to show gains of 218,000 jobs.

Those bullish on retail stocks and consumer spending will be keeping an eye on the shopping numbers that come in during the upcoming Labor Day holiday. While the biggest sales across the board usually come in on Black Friday, Labor Day has proven to be a time for big spending for shoppers.

Today’s rebound affected our 10 ETFs in the Spotlight positively as all of them shifted into reverse and closed higher. Leading the charge was Consumer Discretionaries (XLY) with +2.11%, while Select Dividend ETF (DVY) lagged with +0.95%.

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