Stocks Back On Top Heading Towards The Weekend

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks rallied after three straight days of losses for the S&P 500 and Dow, which on Thursday logged a new closing high and jumped nearly 200 points.

In market movers today, Facebook (FB) climbed 3.7%. The jump added to a 1.3% gain yesterday after the company reached a deal with New York Times and eight other media outlets to post stories directly to the social network’s mobile news feed.

Energy companies in the Dow were little changed as oil prices retreated. Transocean Ltd. and Noble Corp. lost more than 2.7%, while Tesoro Corp. and Valero Energy Corp. gained at least 2.5%.

In economic news, producer prices fell 0.4% in April on a sharp drop in food and gasoline costs, the Labor Department reported. Core prices at the wholesale level, excluding the volatile food and energy categories, fell 0.2%. Also, jobless claims decreased to 264,000, below the 273,000. On the currency side, the U.S. dollar, which had been trending sharply higher heading into April, continued to weaken vs. the euro. The euro climbed to 1.14 vs. the dollar, a three-month high.

All of our 10 ETFs in the Spotlight participated in today’s bullish move as consumer staples (XLP) took the lead with a 1.54% gain; lagging the group were consumer discretionaries (XLY), which added 0.45%. Even SPLV showed signs of life by jumping 1.43%.

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A Nothing Day

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The major indexes fluctuated throughout the day, but there was no conviction in either direction, so the S&P 500 ended down a scant 0.05%. Same with the Dow, however, the Nasdaq managed to edge into plus territory by a meager 0.12%.

The early rally did not hold, and we spend the remainder of the session trying to stay above the unchanged line. Monthly retail sales figure were disappointing with the positive spin being that the Fed might delay any interest hikes due to the economy lacking spunk.

In the end, the tug-of-war between bulls and bears may very well continue until some momentum shift will push the indexes out of their current range bound patterns.

4 of our 10 ETFs in the Spotlight managed to eke out a gain with the leader being healthcare (XLV) with 0.11%, while the downside was led by Consumer Discretionaries (XLY) with a 0.63% loss.

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Equities Close Slightly Lower; Verizon To Buy AOL

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Major U.S. stock indexes closed slightly lower after recouping much of an early slump. The slide was brought on, in part, by a troubling rise in global long-term borrowing rates. The price of oil closed above $60 a barrel for just the third time this year, giving a boost to energy stocks.

One of the major news stories today was that Verizon (VZ) is going to buy AOL (AOL) for $4.4 billion. The strategy behind the acquisition is mostly related to AOL’s advertising platform that will allow Verizon to advertise across mobile and broadband services. Verizon is offering $50 a share for AOL, which is 17% more than AOL’s closing price Monday. AOL closed at $50.52, up almost 19% Tuesday. Verizon finished at $49.62, down less than 1%.

In economic news, the Department of Labor reported that job postings dropped 2.9% in March while total hiring increased by 1.1% — the most since December. U.S. Treasuries rallied today to close higher after early morning losses. Let’s see if the bears will go crawl back into their caves as the week progresses.

All of our 10 ETFs in the Spotlight headed south with XLV losing 0.64%, while IWS held up best by giving back only 0.17%.

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Markets Can’t Keep The Momentum Going

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks fell as Wall Street failed to extend Friday’s strong jobs-fueled rally, and a drop in oil prices helped push energy stocks sharply lower. U.S. benchmark crude fell 26 cents to $59.13 a barrel and shares of ExxonMobil (XOM) dropped 1.7% and Chevron (CVX) fell 1.2% accordingly.

In M&A news, today we saw shares of Rosetta Resources (ROSE) surge 27.2% after Noble Energy (NBL) said it was buying the oil and gas exploration company for about $2.1 billion in stock. Noble’s stock fell 6.2% though.

In scandalous news, Citigroup (C) confirmed Monday that it could plead guilty to an antitrust charge as part of a settlement with the Department of Justice over evidence that traders of the U.S.-based global bank manipulated foreign-exchange currency rates. The stock dropped ever so slightly today by 0.09%.

And in international news, China was back in focus today. The country’s administration cut interest rates again on Sunday, which marks the third time in six months. Investors are worried that the interest rate cut may not be enough to stimulate an economy that is headed for its worst year in a quarter of a century.

9 of our 10 ETFs in the Spotlight slipped as the market lost Friday’s upward momentum. Leading to the downside was SPLV, which gave back 0.72%. The lonely winner was healthcare (XLV) with a small 0.05% gain.

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ETFs/Mutual Funds On The Cutline – Updated Through 05/08/2015

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 310 (last week 308) 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. 55 ETFs (last week 56) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 541 (last week 506) above the line and 279 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: Has Wage Inflation Stalled Because Of Weak Productivity Growth?

Ulli Market Review Contact

92835431The latest nonfarm payrolls report indicate the economy rebounded in the second quarter, although productivity growth seems to have stagnated for some time now, said Ed Lazear, professor of economics at Stanford University.

Creating more jobs without adding to productivity means more people are carving up pieces from the same GDP pie. One of the good things that happened during the recession was that productivity had continued to grow despite a shrinking economy. Unfortunately, the economy failed to sustain that growth rate when recovery took hold, which could largely be attributed to weak investment, particularly weak capital expenditure by both the public and the private sector.

So, the factors of production are not growing in a way they should be growing in order to have high productivity growth. There are some policy explanations for the weak investment cycle, but the bottom line is that because productivity growth stalled in the labor market, there has been no wage growth. The job growth being witnessed is a good thing, but it’s not symptomatic of the state of the labor market; it overstates the strength of the labor market, he observed.

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