Stocks Fall From Intra-Day High

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks ended mixed after a short-lived bump, caused by the release of the minutes from the last Federal Reserve meeting, which showed a June rate hike was unlikely. Federal Reserve policymakers said last month that they were unlikely to raise interest rates in June because of the economy’s recent sluggish performance, according to minutes of the Fed’s April 28-29 meeting. Since the April meeting, reports on trade and retail sales have been surprisingly weak, and economists now estimate the economy shrank in the first quarter, further reducing the prospects for a June rate increase

Flying back to the world of airline stocks, shares of airline companies have been taking a hit across the board recently due to speculation that airlines are going to expand capacity, which could lead to lower fares and lower revenue per available seat mile. This may be a case where growth may not be in the best interest of shareholders. It will be interesting to see how this unfolds in the months to come.

In earnings news, we heard today that Salesforce (CRM) reported slightly better-than-expected quarterly earnings and revenue as its cloud computing segments rose year over year. At the same time, Salesforce raised its full-year revenue guidance to a range of $6.52 billion to $6.55 billion, which would mark an increase of more than 20 percent from the previous year.

Again, 3 of our 10 ETFs in the Spotlight gained on the day with the leader being the Global 100 (IOO), which added 0.37%, while on the downside the Financials (IYF) gave back 0.33%.

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Losing Steam

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

It was a struggle for the indexes today, as the upward momentum of the last few days waned and even a last hour rebound lacked spunk and turned out not to be enough for the S&P and Nasdaq to cross above the unchanged line.

Energy stocks sold off sharply as oil prices hit the skids. Since nowadays good news is bad news, the sharp increase in housing starts was seen as a negative and stocks meandered. Why? Because it’s all about the Fed and if/when they will raise interest rates. That means positive economic data will be seen as aiding the Fed in potentially hiking the rates sooner rather than later.

3 of our 10 ETFs in the Spotlight managed to resist this non-directional trading day and closed up with the leader being the Financials (IYF) with a 0.50% gain. On the downside, Consumer Staples (XLP) fared the worst by giving back 0.26%.

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Stocks Move Higher For Third Straight Day; M&A News Back In Headlines

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks jumped in afternoon trading Monday as investors sent the Dow and S&P 500 up for a third straight session and to new record closing highs. The market’s latest rise is due in large part to the idea that an interest rate hike from the Federal Reserve is still due later this year, coupled with companies continuing to buy back their own shares and use cash to other acquire companies. For now though, it seems that Wall Street is simply relieved that a rate hike isn’t coming in June and first-quarter earnings didn’t contract as feared at the start of April.

In M&A news, Ascena Retail Group (ASNA) bought Ann Inc., the parent company of Ann Taylor and Loft retail chains, for about $2.16 billion. Shares of Ann (ANN) surged 19.9% and Ascena fell 1%. Also, in the pharma world, Endo International (ENDP) announced it is buying Par Pharmaceutical Holdings in an $8.05 billion deal to expand its generics business. Shares of Endo fell 5.4%.

As for the economy, U.S. economic reports were generally weaker than expected this week. Thus far in 2015, the pace of economic growth in the U.S. has gotten off to a soft start. Analysts expect the economy to regain momentum though as the year unfolds, and U.S. growth expectations remain above average when compared with developed economies around the globe. Regarding inflation, which seems to be on everyone’s mind lately, the producer price index posted a modest decline in April, excluding the often volatile food and energy components.

8 of our 10 ETFs in the Spotlight joined the upward move and closed on the plus side. The leader of the day were the financials (IYF) gaining 0.61%, while lagging the pack were consumer staples (XLP) with a loss of 0.32%.

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ETFs/Mutual Funds On The Cutline – Updated Through 05/15/2015

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 410 ETFs, of which currently 326 (last week 310) 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. 62 ETFs (last week 55) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 581 (last week 541) above the line and 239 below it out of the 820 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: Do European Bond Yields Indicate A Shift In Growth Expectations?

Ulli Market Review Contact

92835431The big movements in global interest rates were really about changes in global expectations, particularly around longer term inflation expectations, which is partly related to the turnaround in oil prices and other developments such as shift in expectations for European growth and that’s impacting primarily longer-dated interest rates, said Jeff Rosenberg, chief investment strategist for fixed income at BlackRock.

On the Fed’s side, in shorter-dated interest rates, BlackRock has actually been pushing expectations back since economic data has been weaker than expected and continues to be weak in the first-quarter.

Expectations for first the lift off by the Fed have been pushed out and investors are witnessing a really big steepening in the yield curve with longer-term interest rates going higher and expectations for the Fed has been pushed down that has capped any increase on the shorter maturity interest rates, he observed.

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New ETFs On The Block: IndexIQ Hedge Long/Short Tracker ETF (QLS)

Ulli Leveraged ETFs, Long/Short ETFs Contact

Investments

Investments

IndexIQ, the NY-based exchange-traded fund issuer known for its suite of liquid alternative investment products, recently expanded its unique offerings of hedge fund replication ETFs with the launch of the IQ Hedge Long/Short Tracker ETF (QLS) and the IQ Hedge Event-Driven Tracker ETF (QED). With the launch of QLS and QED, the firm’s hedge-fund replication product-count went up to six.

Both the funds follow index based fund-of-funds methodology and seek to replicate the risk adjusted returns of their respective hedge fund strategies by investing in other exchange-trade products.

The passively managed QLS tracks the performance of IQ Hedge Long/Short Index and is designed to reflect the collective long/short investment strategy, which is also the largest category of hedge funds in terms of asset size. As the name suggests, long/short strategy involves taking both long and short positions in equities in markets worldwide.

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