ETF/No Load Fund Tracker Newsletter For October 31, 2014

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/10/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-10302014/

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Market Commentary

Friday, October 31, 2014

MARKETS TOP OFF RECORD WEEK; JAPAN ADDING STIMULUS TO ECONOMY

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets finished notably higher on the week, led primarily by technology stocks. Both the S&P and Dow closed at record highs Friday, and for the week the S&P 500 finished up 2.72%, the Dow gained 3.48% and the Nasdaq rose 3.28%.

Most of the market gains today were driven by the mother of all assists via news that Japan decided to add more stimulus to its ailing economy. The country’s central bank (BofJ) announced unexpectedly it will boost asset purchases in an effort to jump-start its lagging economy and try to boost inflation, which is dangerously low. How convenient! As the Fed’s QE ended this past week another one gets started indicating to me that the global slowdown is far worse than is being admitted.

Even with gasoline prices in an apparent free-fall, Exxon Mobil (XOM) figured out a way to post strong Q3 earnings. The company said today that its profits were up 3% for the quarter thanks to a very strong performance from its refining business. Profits at the company’s refining operations, which produce chemicals and fuels, rose 38% in the quarter.

On the downside, we heard today that U.S. consumer spending fell in September, which was the first decline since January. Investors were a bit taken aback given that the spending decline followed a big 0.5% increase in August. However, economists believe September was a temporary pause as continued hiring gains will push up spending and the overall economy in coming months.

Our ETFs in the Spotlight joined this week’s party and rallied. The scary mid-October drop into bear market territory is now in the rear view mirror as a total of 3 verbal assists by Fed governor Bullard, ECB head Draghi and now the BofJ combined to make investors feel the warm fuzzies again.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 10/30/2014

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, October 30, 2014

TOC

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 10/22/2014

TTI

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a “Sell” for this arena effective 10/14/2014, which was followed by a violent break back above the line on 10/22/14 generating a new “Buy.” It was a classic whipsaw signal, and you can read more on my blog as to the events as they were unfolding.

As of today, our TTI (green line in above chart) is positioned above its long term trend line (red) by +2.49% keeping us in the market with newly established positions.

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Stocks Rise On Bullish Economic Outlook

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

All the major indexes closed higher today as stocks jumped up across the board on fresh signs the economy is growing stronger, signaled by a positive GDP report. The Dow added 1.3%, the S&P 500 rose 0.6% and the Nasdaq finished up 0.4%. Investors are still a little uneasy though as to how the economy will fare, now that the Fed has officially ended its quantitative easing program

Visa had a big impact on the Dow’s upward movement today as shares surged more than 10.2% following its earnings report that topped analyst expectations.

In tech, it seems the latest trend is earnings reports that disappoint or slowed growth forecast. We have already seen Facebook (FB) and Twitter (TWTR) post sub-par earnings reports. Today, LinkedIn (LNKD) posted earnings that beat expectations, however their updated fourth-quarter revenue forecast showed slowing growth and the stock fell 5%.

And finally, in auto news, both Chrysler (FCAU) and Ford (F) are in the dog house as they have to initiate massive recalls: 503,000 recalls for Chrysler and 205,000 for Ford. Careful on the road everyone!

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Markets Stagnate As Fed Ends Bond Buying Program

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets took a quick but short dive after the Fed’s announcement that its monthly bond buying program had come to an end. The major indexes recovered into the close but ended up on the south side of the unchanged line.

The end of this quantitative easing program came as expected with the Fed expressing confidence in the “economy’s prospects.” With this driver of the markets being gone, at least for the time being, we have reached the point where the rubber meets the road. In other words, can the economy stay on its own two feet with enough momentum to keep the market indexes at these elevated levels?

My guess is that we’ll find out pretty soon once the earnings season has died down. The question in my mind is whether the Fed will have the nerve to not step in with another emergency QE program should the markets retreat by some 10% or more.

In the meantime, we will hold on to our invested positions subject to our trailing sell stops and/or trend line breaks of the TTIs.

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Major Indexes Up Above 1% On Solid Earnings Reports

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Equities rocketed upwards today after investors were encouraged by multiple solid earnings reports as well as a rise in consumer confidence. The Dow gained 1.12% and closed about 17,000 for the first time since October 3rd. The S&P 500 rose 1.19% and the Nasdaq led the pack gaining 1.74%.

Tech stocks in the Nasdaq got a boost today from the surge in Alibaba (BABA) shares, which pushed past $100 a share for the first time. Apple (AAPL) also gained upon rumors that Alibaba might be working with Apple and its Apple Pay initiative. On the flip side, both Twitter (TWTR) and Facebook (FB) shares took a dive today after releasing less than attractive earnings reports and revenue projections.

In the economy, it was reported today that consumer confidence rose sharply in October, reaching its highest level in seven years despite the volatile stock market and global economic weakness. Outlook rose to 94.5 from 89 in September.

Finally, The Federal Reserve opened a two-day meeting today amid volatile markets and a slowing global economy, but economists say it’s likely to send a stay-the-course message that foresees an increase in near-zero interest rates by mid-2015. The news that got downplayed was that QE officially ended today; so, will the stock market be able to stand on its own legs? I would not hold my breath, but we will find out in due time.

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Stocks End Mixed After Record Week

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks took somewhat of a “breather” on Monday, closing mixed just after coming off the best weekly performance of the year. The biggest drag on the markets was that oil prices fell to $80 a barrel, which marks a notable decline from the $107 price in June. Sinking oil prices suggests weakening global growth and signals that supply is outstripping demand. Oil prices are at their lowest levels since June 2012 and more than 20% below their 2014 highs. The S&P 500 dipped 0.13%, but the Dow rose 0.1% and the Nasdaq also added 0.1%.

In earnings news, this earnings season has seen more than 7 out of 10 companies, or 71.4%, in the S&P 500 top third-quarter earnings forecasts, better than the long-term average of 63%. So far, earnings growth is on track for a gain of 7.7%. This week was poised for a batch of earnings announcements from nearly 160 companies. Later this week will bring reports from Caesars (CZR), Electronic Arts (EA), Pfizer (PFE) Starbucks (SBUX) and Facebook (FB).

And in economic news, The Federal Reserve is expected to close a chapter in history this week and announce the conclusion of its massive stimulus program. Let’s stay tuned for this announcement and see if there are any immediate effects on market direction.

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