Equities Gain Slightly In Anticipation Of Earnings Week

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The Dow and S&P 500 just barely managed gains, as investors await a big week of earnings reports and reacted to data out of China showing GDP growth below 7%.

The good news…after suffering its first 10% correction this summer, the Dow has rebounded in recent weeks. The blue-chip index has finished up three straight weeks, its longest winning streak since late last year and the rally has helped the Dow trim its decline to being down just 3.4% for the year. Let’s see if this run can continue.

At least partly impacting stocks today was news out of China, where third-quarter GDP came in at 6.9%. While growth last quarter was better than the 6.8% growth rate analysts had forecast, it was still below the second-quarter’s 7% growth and raised questions as to whether China will be able to reach its full-year GDP target of +7%.

Traders are gearing up for a big week of earnings reports. More than 20% of S&P 500 companies and a dozen Dow stocks are set to report this week. So far this earnings season, 71% of the 58 companies in the S&P 500 that have reported results have topped sharply reduced forecasts.

6 of our 10 ETFs in the Spotlight managed to crawl above the unchanged line with Consumer Discretionaries (XLY) taking the lead with a gain of +0.47%. The S&P 500 Equal Weight ETF (RSP) trailed with -0.14%.

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ETFs/Mutual Funds On The Cutline – Updated Through 10/16/2015

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 69 (last week 41) 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.

These ETFs are generated from my selected list of some 97 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. 12 ETFs (last week 7) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 49 (last week 15) above the line and 751 below it out of the 800 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: 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

Ulli ETF Tracker Contact

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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