One Man’s Opinion: Will China’s Growth Cross 7 Percent Again?

Ulli Market Review Contact

ManAnother market sell-off depends on the Fed’s next move, because the current situation very strongly echoes the conditions of 1998, said Jonathan Wilmot, head of macro investments at Credit Suisse Asset Management.

Former Fed chairman Alan Greenspan had said America was an island of prosperity in a sea of difficulty and that’s applicable right now. The Federal Reserve better wait until the global economy starts to show signs of improvement, he noted.

Asked if there are evidences of the global economy gaining momentum going forward, Jonathan said everybody seems to be worried about China right now though things have clearly changed there a bit as they cared more about reforms than growth over the past 18 months. Now they are likely to focus more on growth than reforms.

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New ETFs On The Block: EgShares EM Core Ex-China ETF (XCEM)

Ulli Emerging Markets ETFs Contact

91551519With China continuing to weigh on investor sentiment across the world, Emerging Global Advisors—the NY-based specialist provider of emerging markets exchange-traded funds, recently launched an EM-focused fund that eliminates the China-factor from investing.

With Chinese equity markets bottoming out and the massive economic rebalancing nearly over, most investors expect China to return to growth by the second-half of next year. Nevertheless, China-skeptic investors that still want an exposure in the emerging markets may find the newly launched EGShares EM Core ex-China ETF (XCEM) an attractive option as the fund compensates the absence of China and Hong Kong with a well diversified product mix from other EM countries.

The passively managed XCEM tracks the EGAI Emerging Markets ex-China Index, a market cap-weighted gauge that measures the performance of up to 700 emerging market companies from 20 nations across the world. The underlying index, developed by EGA Indices in house, includes mostly mid– and large-cap companies that are selected based on liquidity and according to free-float market capitalization.

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ETF/No Load Fund Tracker Newsletter For October 16, 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/2015/10/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-10152015/

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Market Commentary

STOCKS CONTINUE MOVING HIGHER ON BULLISH CORPORATE EARNINGS

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks ended moderately higher Friday as the post-correction rally rolled on amid signs U.S. companies will top low third-quarter earnings estimates and the growing belief the Federal Reserve will hold off on interest rate hikes until 2016. Each of the three major benchmarks climbed for a third straight week.

In earnings news, General Electric (GE) topped earnings estimates by 3 cents, although its revenues fell shy of analyst estimates. Shares of GE, which is a Dow component and a barometer of economic health at home and abroad, were up 3.4%.

Investors were also digesting economic news today. The preliminary reading on October consumer sentiment from the University of Michigan came in stronger than expected at 92.1, its highest level since July and up sharply from September’s final reading of 87.2.

On the jobs front, job openings in August dipped to 5.37 million from 5.7 million in July, but were still deemed healthy by economists.

All of our 10 ETFs in the Spotlight eked out a gain today with the leader being Healthcare (XLV) at +0.96% while the Mid-Cap Value (IWS) lagged with +0.01%.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 10/15/2015

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, October 15, 2015

TOC 101515

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 -0.46% 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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Big Gains On Wall Street—A New Domestic Buy On The Horizon?

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks jumped Thursday, the Nasdaq gaining 1.8% and the Dow climbing 217 points amid mixed profit results from major banks and as less-than-stellar incoming economic data lowered chances of Federal Reserve interest rate hike later this year.

The rebound came a day after shares tumbled sharply after giant retailer Walmart (WMT) warned of a big drop in earnings in its 2017 fiscal year.

Driving the stock action Thursday was an earnings beat by banking giant Citigroup (C), which topped analyst expectations by 3 cents, and a minor miss from Wall Street titan Goldman Sachs (GS), whose earnings came in a penny shy of expectations. Both Citigroup and Goldman Sachs fell shy on revenue.

Wall Street also digested fresh economic data. First-time jobless claims fell 7,000 to 255,000 to a pre-recession low in the latest weekly report, signaling once again that the employment picture is improving. On the inflation front, inflation at the consumer level, or the CPI, fell 0.2% in September, in line with economists’ expectations. The continued low inflation also gives credence to Wall Street’s theory that the Fed will hold off on rate hikes this year.

The question now is will there be enough follow through momentum to generate a new domestic Buy signal? As you can see in section 3, we’re getting close but are not there yet.

In a reversal from yesterday, all of our 10 ETFs in the Spotlight joined the party and closed higher. The leader was Healthcare (XLV) with +2.17%, while Consumer Staples (XLP) and the Dividend ETF (DVY) lagged a little with +0.90%.

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Earnings Drag Markets Down

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets closed lower today after a lackluster bunch of quarterly earnings reports. The reports gave a somewhat confirming nod to speculative investors that the U.S. and global economy will may experience a slowdown over the next year,

As far as earnings go, Walmart (WMT) shares experienced their lowest one-day drop in nearly thirty years after the U.S. retailing giant jolted financial markets by forecasting a 6% to 12% earnings drop in fiscal year 2017. The company said earnings for sales growth for the current fiscal year would be flat, a drop from the 1% to 2% increase earlier forecasted by Wall Street analysts.

On the other side of the coin, the air travel market seems to be boding well for Delta (DAL). Today, the company announced $1.4 billion in adjusted net income for the Q3, or $1.74 per diluted share, amid low fuel prices and solid demand from travelers. The strong performance that marked a 45% improvement over the same period a year earlier is expected to continue during the final three months of the year, according to Delta’s CEO Richard Anderson.

Also in earnings news today, shares of Netflix (NFLX) sank 8.7% to $100.61 after the company reported that U.S. subscriber additions fell below its own forecast.

None of our 10 ETFs in the Spotlight was able to buck the trend and all closed lower with Consumer Staples giving back -1.16%, while Healthcare (XLV) held up best with -0.19%.

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