One Man’s Opinion: Will The ECB’s Surprise Interest Rate Cuts Be Followed By QE?

Ulli Market Review Contact

92835431European Central Bank President Mario Draghi surprised markets by announcing cuts in all the three main interest rates after inflation weakened further to a 0.3 percent annual rate in the euro area.

A full-fledged quantitative easing might be unveiled after starting off with asset-backed securities – what Draghi calls “simple transparent ones,” said Kit Juckes, Global Strategist at Societe Generale. The initial purchases are likely to be mortgage-backed debt, commercial mortgage-backed debt, credit card debt and so on.

That’s the first step that gets the eurozone economy up and running. In the next few months Draghi may try to persuade Bundesbank chief Jens Weidman and others to allow him to expand the QE in the general direction of European government bonds too to get at the meat where there is much, much more debt that he can buy into. However, Draghi has made it clear that the ECB won’t be buying complicated debt such as the junior structures of CDO and CDO squared of asset-backed securities, he noted.

Read More

New ETFs On The Block: First Trust Enhanced Short Maturity ETF (FTSM)

Ulli Bond ETFs Contact

104394781With the gradual improvement in US economy and strengthening of the labor market, speculations about an earlier-than-expected rate hike is slowing gathering pace.

First Trust Portfolios, the Il-based sixth largest US issuer of exchange-traded funds, recently unveiled the First Trust Enhanced Short Maturity ETF (FTSM) to give investors exposure in the short-end of the duration curve with the aim of protecting client-capital while providing current income.

The actively-managed fund invests in short-duration and investment-grade debt securities that are primarily denominated in US dollars. Duration is a measure of interest rate risk. Securities with higher duration experience wide price changes for small change in interest rates. FTSM has a weighted-average effective duration of 0.27 years and a weighted-average maturity of 0.77 years, indicating low interest-rate risk.

Read More

09-05-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For September 5, 2014

ETF/No Load Fund Tracker StatSheet

————————————————————-

THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2014/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09042014/

————————————————————

Market Commentary

Friday, September 5, 2014

MARKETS END THE WEEK SOMEWHAT FLAT DESPITE FAVORABLE ECONOMIC DATA

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks teetered sideways for most of the week, finishing slightly higher by Friday. Despite slower job growth than expected, several economic data points suggest the domestic economy continues to strengthen. For the week, the major indexes gained as the chart above shows.

Moving the markets this week was an aggressive shift in monetary policy in the eurozone, as the ECB cut interest rates and announced a program to purchase bonds to provide monetary stimulus. This is apparently intended to lower interest rates, spark stronger economic growth, which has faltered recently, and ultimately pick up low European inflation.

The stock market also got a lift from a cease-fire agreement between Ukraine and Russian-backed separatists, aimed at bringing an end to nearly five months of fighting.

The week ahead will be somewhat quiet for economic data. Reports will include retail sales, as well as consumer sentiment for September. Retail sales are expected to rebound 0.5% in August, following what was a disappointing flat monthly increase in July.

All of our 10 ETFs in the Spotlight closed higher today with 9 of them making new highs for the year.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

Here are the 10 candidates:

MaxDD

All of them are currently in “buy” mode, meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

Year to date, here’s how the above candidates have fared so far:

YTD

To be clear, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point is taken out in the “Off High” column.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) vacillated during this see-saw week and closed mixed:

Domestic TTI: +3.00% (last Friday +3.22%)

International TTI: +2.69% (last Friday +2.59%)

Have a nice weekend.

Ulli…

Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.

————————————————————-

READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

Reader Roger:

Q: Ulli: Could the ten Spotlight ETFs be used in a portfolio investment strategy or just for a piece of an overall portfolio?

Second, would you logically try to weight the percent investment in each by tracking an appropriate benchmark?

A: Roger: Sure, you can use it as a standalone portfolio, as some readers have done, or, you could use only those ETFs that are showing strong upward momentum, such as I do in my advisor practice.

More importantly, you need to follow my recommended sell stop discipline, to make sure you limit your downside risk should this bull market die all of a sudden.

———————————————————-

WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

———————————————————

Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/

ETF/No Load Fund Tracker Newsletter For September 5, 2014

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2014/09/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-09042014/

————————————————————

Market Commentary

Friday, September 5, 2014

MARKETS END THE WEEK SOMEWHAT FLAT DESPITE FAVORABLE ECONOMIC DATA

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks teetered sideways for most of the week, finishing slightly higher by Friday. Despite slower job growth than expected, several economic data points suggest the domestic economy continues to strengthen. For the week, the major indexes gained as the chart above shows.

Moving the markets this week was an aggressive shift in monetary policy in the eurozone, as the ECB cut interest rates and announced a program to purchase bonds to provide monetary stimulus. This is apparently intended to lower interest rates, spark stronger economic growth, which has faltered recently, and ultimately pick up low European inflation.

The stock market also got a lift from a cease-fire agreement between Ukraine and Russian-backed separatists, aimed at bringing an end to nearly five months of fighting.

The week ahead will be somewhat quiet for economic data. Reports will include retail sales, as well as consumer sentiment for September. Retail sales are expected to rebound 0.5% in August, following what was a disappointing flat monthly increase in July.

All of our 10 ETFs in the Spotlight closed higher today with 9 of them making new highs for the year.

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 09/04/2014

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, September 4, 2014

Table of Content082312

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our TTI (green line in above chart) is positioned above its long term trend line (red) by +2.90%.

To avoid a potential whip-saw, a Sell signal to move out of all domestic equity positions will be generated once we have clearly pierced the red line to the downside. Be sure to tune in for the latest updates.

Read More

Coming Off The Highs

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

After making a new intra-day all-time high, the S&P 500 pulled back, as the early rally, propelled by the ECB’s new stimulus efforts, ran out of steam powered by a decline in the energy sector. The major indexes retreated modestly, as the chart above shows.

Contributing to the pullback was overall nervousness ahead of tomorrow’s all important jobs report. Expectations are for a growth in payroll of some 225,000. We’ll find out in the morning if that guess is fact or fiction.

Starting the day on a positive for the markets was the ECB decision, along with a new QE program, to lower a key interest rate to stimulate the sagging economies of Europe. It’s questionable whether that effort will produce the desired results but only time will tell.

On this slippery day, 2 of our 10 ETFs in the Spotlight gained with 1 of them making a new high for the year.

Read More