ETF/No Load Fund Tracker StatSheet
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Market Commentary
Friday, October 10, 2014
A VOLATILE WEEK—DOMESTIC TTI SLIPS INTO BEAR MARKET TERRITORY
1. Moving the Markets
Well, here we are winding down one of the most volatile weeks we have seen since January. Equities are at a seven-month low and oil is at a four-year low. All of the major indexes dropped as the above 5-day chart shows. October has already achieved the “most volatile month for stocks” title since June 2013, with five daily up or down movements of 1% or more.
Despite a range of incoming data that signal the U.S. economy is improving, investors have grown increasingly concerned about growth in the rest of the world, particularly in Europe and China. One of the biggest shocks to the markets this week was the IMF’s adjustment to its global economic growth forecast down to 3.3%, which marks its fourth downward adjustment this year.
In tech, we heard this week that Samsung Electronics, the global leader in Smartphone sales, estimated a drop in Q3 operating profit of more than 50% from a year earlier. The mobile division’s profit is being severely curtailed on the low end by tough competition from Chinese vendors. On the high end, Apple’s popular new large-screen iPhone 6 Plus has reduced consumer appetite for Samsung’s flagship Galaxy S5, forcing the firm to cut product prices and spend more on marketing.
In regards to trend direction, our Domestic TTI just slipped below its long-term trend line and into bearish territory. Please section 3 below for more details.
Let’s look to next week to (hopefully) see some reduction in volatility as corporate earnings announcements get further under way.
9 of our 10 ETFs in the Spotlight slid with the indexes, one bucked the trend and one triggered its trailing sell stop as you can see in the YTD table below.
