
[Chart courtesy of MarketWatch.com]
1. Moving the Markets
U.S. stocks posted a second straight day of declines but trimmed earlier losses to end only slightly in the red. Stocks have been on a consistent decline since late August, since fears around China’s slowing economy and global growth in general took hold. As you know, according to my Domestic Trend Tracking Index (TTI), we have been in bear market territory effective 8/24/15.
One thing that could turn market sentiment is a fundamental factor in equity valuation, corporate profits. Corporate earnings season for Q3 will begin in early October and Wall Street hopes upcoming earnings reports can break the volatility that markets have been experiencing.
Shares of German automaker Volkswagen (VLKAY), which admitted it used software to cheat on emissions tests, rose about 3% Wednesday, snapping a two-day losing streak. Many investors are showing mixed emotions on where the stock could go, especially given that the CEO Martin Winterkorn announced today that he will be resigning. Volkswagen’s board is expected to appoint a successor on Friday.
And in airline news, Xi JinPing has approved a deal for China to buy 300 Boeing aircraft for $38 billion and build the first aircraft completion plant in that country. The massive Boeing order includes 190 of the 737 model aircraft and 50 wide-body planes for Chinese airlines, and 60 single-aisle planes for leasing companies. China Aviation Supplies Holding Company, ICBC Financial Leasing Co., Ltd., and China Development Bank Leasing with Boeing, will be purchasing the planes.
Our 10 ETFs in the Spotlight presented a mixed picture with 3 of them gaining and 7 of them losing. Leading on the upside were the Financials (IYF) with +0.31%, while on the downside the equal weight ETF (RSP) surrendered -0.42%.
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