Stocks Slide On Disappointing Earnings

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities hit he skids for the 3rd day in a row as, following Apple’s disappointing report card yesterday, 3M and Caterpillar joined the crowd, and the slide in stocks continued killing any hope of a rebound. Commodities offered little help as they seem to be stuck in a bearish trend of their own.

In the case of Caterpillar, international sales have been unimpressive due to the pricing slump in coal, iron ore and copper. Not helping matters has been the hard hit energy industry where oil and gas prices continue their path south, so new heavy duty equipment has not been needed.

And as always, any and all economic reports are being scrutinized for any clues as to when the widely expected rise in interest will actually happen. According to the latest, the Fed is supposed to finally pull the trigger this coming September, but, the odds are only put at 50%.

All of our 10 ETFs in the Spotlight joined the major indexes and headed lower. Resisting the sell-off the best was Healthcare (XLV), which gave back -0.34%, while the Financials (IYF) showed the most weakness by surrendering -0.83%.

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Major Indexes Close Lower—Apple’s Slide Is The Culprit

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Tech stocks continued to be a drag on the major indexes after results from Miscrosoft and Apple disappointed. As is always the case, Apple certainly did not do poorly; it’s just that expectations are so overblown than anything close to realty seems to cause a pullback.

In the bigger picture, the question remains whether the weakness in tech stocks is a reflection of how the economy is performing, and if this is a harbinger of things to come.

Despite the weakness, 8 of our 10 ETFs in the Spotlight managed to buck the trend and close higher. Leading on the upside were the Financials (IYF) with +0.62%, while the downside was headed by the Global 100 with a -0.77% loss.

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Techs Drag Dow

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities pulled back as a result of IBM and United Technologies putting the first negative on the board this earnings season just prior to the heavyweights, Apple and Microsoft, issuing their quarterly report cards after today’s close.

The major indexes are still near record highs and, after having been on a tear over the past 1-1/2 weeks, a pullback was way overdue. It’ll be a continued tug-of-war over the next 10 trading sessions or so until it becomes clear whether the bulls can remain the upper hand.

Other than earnings, there were no market moving events.

All of our 10 ETFs in the Spotlight participated in the pullback with Consumer Staples (XLP) holding up the best with -0.24%, while the Select Dividend ETF (DVY) fared the worst by giving back -0.69%.

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S&P 500 Rises To New Record Before Retreating

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities looked a little tired after the solid run of the past 1-1/2 weeks and ended only slightly changed. The S&P managed to temporarily climb above its old record high (on very meager volume) but was not able to hold the gain and ended up 1 point above the unchanged line.

So far earnings have been better than expected, which has helped the recent run along with good M&A activity. Greece’s problems are allegedly resolved with a final pact to be on the table anytime now, so that pressure is off the markets for the time being. Of course, as I have stated before, the Greek crisis has merely been postponed and can rear its ugly head anytime; that is if you don’t view things through rose-colored glasses.

Despite the recent rally, we’re still range bound and are nearing the upper end. Data showed that the S&P hasn’t closed in 2015 more than 3.5% above or below where it started the year. I am not sure what value this fact has for investors, but some claim that this bull has another 2 years of life left. Well, be that as it may, we’ll continue to follow the trends and let our sell stops be the guide in determining whether this bull is still alive or not.

7 of our 10 ETFs in the Spotlight climbed higher as the indexes ended up only slightly change. Leading the group was Healthcare (XLV) with +0.32%; on the downside, the Mid-Cap Value ETF (IWS) surrendered -0.42%.

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ETFs/Mutual Funds On The Cutline – Updated Through 07/17/2015

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 212 (last week 179) 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. 38 ETFs (last week 32) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 379 (last week 418) above the line and 441 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 Downside Risks To The Economy Still Exist?

Ulli Market Review Contact

ManThe latest retail sales reading that showed June sales (excluding automobiles) slipped 0.1 percent doesn’t suggest the US economy has turned a corner and the economy would be able to sustain a hike in interest rates, said Austan Goolsbee of the Chicago Booth School of Business.

While global events such as the turmoil in Greece and the meltdown of Chinese stock market are a cause for concern, the domestic economy has not lived up to investors’ expectations either and failed to meet the Fed’s own projection.

The economy is likely to follow the same path witnessed in the past few years and the Federal Reserve will keep pushing back the rate lift-off because the data is not strong enough, he observed.

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