No Warm Fuzzies From The World Bank

Ulli Market Commentary Contact

Wed chart

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The U.S. markets slid back into negative territory today as a response to the World Bank announcing its reduction of the global growth forecast from 3.2 to 2.8%. The selloff was broad, as every S&P 500 sector index (except energy) declined for the day. The World Bank has clarified that the looming interest rates in United States and United Kingdom have a large impact on the forecast. While the economy has been slowly recovering from a topsy-turvy Q1, the World Bank suggests that the impact of Q1 would hurt the global economy throughout the year.

One of the biggest losers today was Bank of America (BAC), which dropped 2.1%. Apparently, the bank has hit a wall in their negotiations with the govt regarding the ongoing multi-million dollar settlement that stems back to the mortgage crisis of 2008.

News of the airline industry zoomed across headlines today. Lufthansa cut their 2014 forecast due to a slowdown in consumer demand; United Continental, Delta and American Airlines all witnessed a drop in share price today. It may surprise you to hear that Delta’s stock is actually up 48% this year, which is the highest of any airline stock.

Our 10 ETFs in the Spotlight slipped with XLY now showing a negative result again YTD.

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A Calm Tuesday For The Markets; More Bad News From Radioshack

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks moved in both directions today with the Dow closing in positive territory while the S&P 500 finished just inside the red zone. The stock market has been on a slow and steady climb since April, and in recent weeks has been pushed by a number of encouraging economic reports. At present, the S&P 500 is up 5.5% on the year.

EBay Inc. (EBAY) dropped 2.7% after saying David Marcus will step down as the head of its PayPal unit to join Facebook Inc. And in M&A news, Tyson Foods Inc. (TSN) slid 3.8 percent to $36.07, capping a sixth day of losses, the longest streak since September. The largest U.S. meat company closed yesterday at the lowest since February after raising its offer for Hillshire Brands Co. (HSH) to about $7.7 billion.

When was the last time you went to RadioShack? If you said more than nine months ago then you may be to blame. RadioShack (RSH), the consumer electronics retailer, said its first-quarter loss widened to $98.3 million as sales slid for the ninth straight quarter. The stock is now trading at $1.38 and analysts are really questioning how much longer they can keep the doors open.

Our 10 ETFs in the Spotlight barely moved; however, SPY managed to eke out a new high today.

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I Would Like To Buy Three ‘As’ Please. Sorry, Better Luck Next Time

Ulli Market Review Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The markets stayed in the green zone after a minimal amount of economic news to trade on and no major M&A announcements. All major indexes showed small gains for the day.

There was a decent amount of news in the tech world today. Internet domain registration company GoDaddy finally pulled the trigger on its move towards an IPO. The company has filed its prospectus to sell $100 million-worth of shares to the public, ending months of speculation. The initial public offering makes GoDaddy the last Internet darling to take advantage of the open window for new stock offerings.

Well, those hoping that the U.S. would regain its premier status as a top credit rated borrower saw their hopes wash away today. Credit ratings agency Standard & Poor’s reaffirmed its AA+ rating on U.S. debt. Some optimists have been hoping that the U.S. could regain its AAA rating, after losing it on Aug. 5, 2011 following the damage of the financial crisis. Most analysts are citing elected officials’ inability to react swiftly and effectively to public finance pressures.

Our 10 ETFs in the Spotlight inched higher; 5 of them made new highs today while all 10 of them are now on the plus side YTD.

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ETFs/Mutual Funds On The Cutline – Updated Through 06/06/2014

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 398 ETFs, of which currently 384 (last week 362) 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. 87 ETFs (last week 82) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 757 (last week 625) above the line and 93 below it out of the 859 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 Growth In The Second Half Be Stronger?

Ulli Market Review Contact

92835431The latest jobs report is positive as it shows the economy continues to heal though there is a lot of work that needs to be done, said Alan Krueger, a professor at the Princeton University and former chairman of the White House Council of Economic Advisers.

There are longstanding problems that even predate the recession that need to be addressed. But the latest data shows the expansion is continuing and may be even gathering a little bit of steam. It’s been a steady recovery, and it looks like it’s going to keep going, he added.

Asked if the recovery will gather steam or simply continue to notch up incremental gains, Alan said the economy needs to build on the progress that it has achieved so far and incremental gains is probably the best thing people can hope for given the nature of the crisis. The economy continues to experience some weaknesses given how much wealth was destroyed and how much overbuilding took place in construction.

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New ETFs On The Block: Powershares Multi-Strategy Alternative Portfolio (LALT)

Ulli Currency ETFs, Equity ETFs Contact

Money Market analysis, calculator, cashInvesco PowerShares, the Illinois-based fourth-largest US provider of exchange-traded funds, has launched a multi-strategy, alternative portfolio in partnership with Morgan Stanley that focuses on enhanced risk-adjusted returns while lowering volatility.

The PowerShares Multi-Strategy Alternative Portfolio (LALT) is likely to find favor with traditional stock/bond investors who wish to better manage volatility as interest rates begin to normalize in the US. The liquid alternatives and the multi-alternative segments are fairly crowded with 125 funds currently on offer (per Morningstar) although there are only four ETFs in the category. Invesco Advisors will sub-advise LALT.

The new fund tracks the Morgan Stanley Multi-Strategy Alternative Index, a proprietary benchmark that combines multiple rules-based, quantitative strategies and has a low correlation to traditional asset classes. However, since LALT is an actively managed fund, it doesn’t aim to fully replicate the index; instead it looks to generate returns in excess of the returns from the index by investing in a combination of equities, financial futures, currency forwards and other securities.

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