Selloffs Drag Markets Lower

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets experienced one of the largest sell-off in equities over the past two months. A rising dollar value and declines in tech companies stock seemed to be the major culprits today.

In tech Cisco Systems Inc. (CSCO) took a hit for the sixth time in seven days, suffering its largest daily decline since 2013. Apple (AAPL) also fell today, despite the bullish news on its smart-watch of late.

How did the dollar impact markets today? Well, the currency’s climb to a 12-year high versus the euro is concerning investors that earnings may be somewhat inflated and could thus take a major hit of the dollar weakens.

An interesting piece of news that came in today was that pet retail giant PetSmart (PETM) announced it has been taken private by a group of investors called BC Partners. The acquisition was priced at $8.7 billion. Apparently, the President and CEO are stepping down as part of the deal. The company’s shares rose 4 cents to $82.99 in afternoon trading. The stock will be delisted after the close of trading Wednesday.

2 of our 10 ETFs in the Spotlight managed to eke out a gain on this slippery day. The biggest loser was consumer staples (XLP), which skidded -0.77%. 2 ETFs remain green YTD as you can see in table 2.

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Major Indexes Hit The Skids

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Pricing in a potential rate hike by the Fed came home to roost as the Dow suffered its worst one-day point drop in some five months. Despite some central banks starting a quantitative easing path, such as the ECB, there was simply no support, and the major indexes went negative YTD.

Europe’s QE launch made the dollar stronger, and we might move to parity with the Euro currency. If in fact the Fed raises rates later on this year, we will be at odds with the rest of the world where lower interest rates and consequently weaker currencies are supposed to spark some growth by making exports more competitive.

This pullback reminds me of what we saw in October last year, and I am wondering if the usual assist to drive markets higher again, might be on the horizon. That assist came in form of one of the Fed’s mouthpieces jawboning about lower rates are here to stay and/or the reinstatement of QE4. Nothing would surprise me, but only time will tell if this kind of rescue effort will materialize.

To no surprise, all of our 10 ETFs in the Spotlight headed south, as there was simply no place to hide today. Leading the pack down were the financials (IYF) at -1.90%, while healthcare (XLV) showed the most resistance at -1.11%. Only 2 ETFs remain on the plus side YTD.

Our Trend Tracking Indexes (TTIs) retreated as well but remain on the bullish side of their respective trend lines (see table 3).

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Markets Full Steam Ahead To Begin The Week

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

All major indexes closed higher to kick off the week of March 9th, apparently bullish on some tech stocks, Apple (AAPL) in particular. More details came out today on Apple’s newest gadget – The Apple Watch. Apple is looking to extend its dominance on mobile devices with the new gadget which Cook called “the most advanced timepiece ever created.”

It was previously announced that the “smartwatch”, which is the company’s first big rollout since the iPad, will go on sale in April, with three editions starting at $350. It was also revealed today that an 18-karat gold version will be available, starting at a meager price of $10,000.

In auto news, General Motors (GM) announced this morning that it will repurchase $5 billion in shares by the end of 2016, to begin immediately. Alongside the buyback, Harry Wilson will withdraw his candidacy from the GM board of directors.

And in M&A news, metals manufacturing giant Alcoa Inc. (AA) announced today that they plan on buying RTI International Metals (RTI) for a proposed $1.5 billion. The acquisition marks a strategic move from Alcoa to increase its presence in the aerospace business, a company representative said.

All of our 10 ETFs in the Spotlight followed the rebound to higher levels and closed up. Leading the charge today was healthcare (XLV) with a gain of +0.62%.

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ETFs/Mutual Funds On The Cutline – Updated Through 03/06/2015

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 246 (last week 291) 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. 41 ETFs (last week 51) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 281 (last week 459) above the line and 439 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: Will The Fed Be Careful About Raising Rates?

Ulli Market Review Contact

92835431The latest jobs report showed the economy created 295,000 jobs in February and surprised markets on the upside though overall the report was not as good as the headline-number would suggest, said Jan Hatzius, chief economist at Goldman Sachs.

The unemployment rate also came down a bit, but that was driven primarily by weak labor-force participation. Similarly, wage gains also came in a little bit on the softer side; so when all data points are taken together, it’s a good report but not wildly away from expectations, he added.

Most of the sectors across the board witnessed robust growth with manufacturing and business services topping the chart. Even retail added 32,000 in a month when everybody thought the deadlock at the West Coast port would slow down things pretty much.

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New ETFs On The Block: iShares MSCI International Developed Momentum/Quality Factor ETF (IMTM, IQLT)

Ulli International ETFs Contact

91551519iShares, the San Francisco-based exchange-traded fund issuing arm of BlackRock, recently launched two international factor-based ETFs to expand its lineup of the so-called smart-beta funds. Many analysts, however, believe that latest launches were an attempt by the world’s biggest ETF issuer to match the wide-range of multi-factor fund offerings by rival provider State Street Global Advisors.

To be sure, the timing of the launch is also important, particularly when the European Central Bank is scheduled to launch its own version of an open-ended Quantitative Easing as of Monday.

Both the passively-managed funds – the iShares MSCI International Developed Momentum Factor ETF (IMTM) and the iShares MSCI International Quality Factor ETF (IQLT), seek opportunities in developed markets outside the US and, like their US-focused earlier avatars MTUM and QUAL, both the new ETFs seeks to tap returns generally not available with traditional capitalization-weighted funds.

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