Dow Continues Riding High; Great Day For Media Stocks

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

The Dow kept trucking forward further into record territory for a fourth straight day, ending the day up 0.5% at a new all-time high of 17,138.20. The S&P 500 and Nasdaq also rode the momentum of the blue-chip index higher, gaining 0.44% and 0.22% each.

Numerous investor eyes turned to Time Warner Cable (TWC) as news emerged of a potential $80 bil takeover bid by Rupert Murdoch’s 21st Century Fox. Other media stocks also got a boost from the news: Viacom (VIA) was up 3.5%, CBS (CBS) gained 2.1% and Disney (DIS) gained 6%.

In the tech world, recent musings about Apple (AAPL) and IBM (IBM) potentially teaming up to develop mobile apps together became a bit more confirmed today. Apple gained 0.6% and IBM added 2.3%. Also, we received a favorable earnings report today from Intel (INTC) and shares shot up 8% subsequently.

Finally, you may remember a couple of days ago I mentioned the upcoming economic growth report due from China. Well, we received the numbers today, and the report showed that the world’s second-largest economy expanded 7.5% year-over-year, which was slightly above the 7.4% growth numbers from Q1.

Our 10 ETFs in the Spotlight picked up momentum with 2 of them making new highs today.

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Stocks Rally Early; But End Up Subdued By Yellen’s Remarks

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks were rallying early today, riding the wave up from yesterday, however, the momentum was brought to halt shortly after Janet Yellen made a comment about the stock market being “substantially stretched” in terms of valuations. The Dow ended the day barely above water by 0.03%, while the Nasdaq lost 0.5% and the S&P dropped 0.2%.

Early gains were mostly due to earnings announcements by JPMorgan Chase (JPM), Goldman Sachs (GS) and Johnson & Johnson (JNJ) that beat Wall Street estimates. Apparently, investors did not favor some M&A news today, as we heard Cigarette maker Reynolds American (RAI) is buying rival Lorillard (LO) for about $27 billion. Shares of Lorillard sank 6.9% and Reynolds dropped 6.9%.

Don’t be surprised if investors turn attention back to China tomorrow. China, the world’s No. 2 economy, is due to report its second quarter GDP numbers on Wednesday. Premier Li Keqiang raised hopes for an upbeat outcome by commenting last week that growth improved from 7.4% in the first quarter, but let’s see what the data says.

Our 10 ETFs in the Spotlight went sideways but 1 of them managed to eke out a new high.

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Stocks Back On Track Amidst Solid Report From Citigroup And M&A News

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks kicked off this week on a high note as the markets rocketed higher with the Dow once again passing the 17,000 mark to close at 17,055. In general, investors were encouraged by a slew of M&A activity alongside better than expected earnings from Citigroup. All major indexes gained as the chart shows.

In M&A news, Shares of drug maker Mylan (MYL) jumped 2% to $51.24 after the company announced it will buy Abbott Laboratories’ (ABT) generic-drugs business in developed markets for stock valued at about $5.3 billion. Abbott gained 1.3% to $41.82.

Also in pharmaceutical M&A news, AbbVie (ABBV), maker of the arthritis drug Humira, offered over the weekend to pay cash and stock equal to about $91.10 a share for Shire (SHPG), maker of the attention deficit hyperactivity disorder drugs Vyvanse and Adderal XR. Its latest offer exceeded its prior one of $51 billion.

This is a great start to the week, and with the market trading near all-time highs, investors will be focused on a large number of corporate earnings coming down the pipeline, including quarterly reports from General Electric (GE), Google (GOOG), Bank of America (BAC) and Johnson & Johnson (JNJ).

Our 10 ETFs in the Spotlight rallied with the indexes with 2 of them reaching new highs.

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ETFs/Mutual Funds On The Cutline – Updated Through 07/11/2014

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 375 (last week 392) 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 91) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 761 (last week 811) above the line and 89 below it out of the 850 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: Is The Federal Reserve Likely To Defer Rate Hikes Since Inflation Has Remained Weak?

Ulli Market Review Contact

92835431The recent turmoil in the markets caused by Portuguese lender Banco Espirito Santo almost looked like a mini panic as a lot of investors jumped the gun assuming another credit crisis has hit Europe, said Brian Jacobsen, Chief Portfolio Strategist at Wells Fargo Advantage Fund. However, it may well turn out to be a good buying opportunity as markets are likely to witness a rebound from here, he noted.

Asked what is fueling investor confidence, Brian said after the latest selloff, people realized soon that banks in the euro zone are not as bad as they thought. The situation in Europe is a lot better than it was two years ago, or even one year ago; and when people realized that and came to their senses, markets quickly recouped losses. The fundamentals, i.e. business earnings in the US, are continuing to grow. The continued upward trend of corporate earnings is stoking market confidence, he observed.

Latest data show 16 out of 25 companies beat earnings estimate so far this year. Asked if the earnings season will be able to maintain the strike-rate, Brian answered in negative. Analysts’ expectations were too lofty in terms of a rebound in the second quarter because of the sharp decline in the first-quarter GDP (minus 2.9 percent). The negative GDP print didn’t really translate into a downdraft for corporate earnings, which is a little surprising.

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New ETFs On The Block: Advisorshares Sunrise Multi-Strategy ETF (MULT)

Ulli International ETFs Contact

91551519AdvisorShares, the Bethesda, Maryland-based issuer famous for its actively managed suite of funds, expanded its offerings by launching a new product focused on the liquid alternative strategy.

The newly debuted AdvisorShares Sunrise Multi-Strategy ETF (MULT) is managed by Sunrise Capital Partners, a San Diego-based registered investment advisor famous for its quantitative asset management expertise. AdvisorShares now sponsors 25 active ETFs with assets under management exceeding $1.9 billion.

Though Sunrise has been around for nearly 35 years, it has been managing assets of high-net-worth individuals, small family offices, few foundations and bigger institutional-focused Wall Street investors. It presently oversees client assets with products that include a hedge fund and a separately managed account. MULT marks the sub-advisor’s entry into the 1940 Investment Company Act space that governs open-end funds.

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