Markets Dip Slightly; S&P 500 Or 501?

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The S&P 500 index fell 0.1 %, staying near its all-time high of 1,890 that it posted a day earlier. The Dow broke even, and the Nasdaq composite fell 0.9% due to poor biotech performance and a selloff of recent “momentum” stocks.

Among the big momentum Nasdaq stocks that fell were Tesla Motors (TSLA) by 2.1%, Netflix Inc (NFLX) dropped 2.3% and Facebook (FB) shares fell 5.2%.

The Google split did in fact commence today. So, the S&P 500 now consists of 501 stocks, with the index including both Google Inc’s Class A (GOOGL) and Class C (GOOG) shares after the company’s special dividend. Google’s Class A shares rose 0.6% to $571.50 while its Class C shares gained 0.5% to $569.74.

On the economic front, a survey showed that U.S. service firms increased their business more quickly last month as new orders rose. Separate reports earlier in the week had shown manufacturing strengthening, hiring picking up, and sales of cars and trucks rising. The news came ahead of the government’s monthly jobs report, which will be published Friday and is keeping investors anxious. Overall, analysts expect to see a strong pickup in hiring.

Some of our 10 ETFs in the Spotlight edged higher today with 3 of them making new highs; 9 of them are now on the plus side YTD.

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S&P Reaches New High; GOOGLE To Initiate Stock Split

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks ended the day in positive territory for the fourth straight day on Wednesday, driven largely by positive economic reports on employment. The S&P 500 closed at a new record high of 1,890.90, while the Dow and Nasdaq closed up 0.24% and 0.20% respectively. The report released by the ADP showed that U.S. private employers added 191,000 workers in March, which was a big rebound from the past two months where job growth averaged 150,000. Investors are now anxiously awaiting the monthly government jobs report, which is due this Friday.

In corporate news, Google (GOOG) announced a stock-split that will take place tomorrow.  Owners of Google Class A shares — ticker symbol GOOG through Wednesday — will get an equal number of new Class C shares. Those Class C shares will get the GOOG symbol, while the Class A shares will trade under the symbol GOOGL. Google shares closed on Wednesday at $1,135.10. Trading on a when-issued basis, the new Class C shares closed at $567, and the new Class A shares closed at $568.07.

In other corporate news, MannKind (MKND) surged more than 80% today to $6.99 after an advisory committee to the U.S. health regulator recommended approval for the drug-maker’s inhaled insulin treatment for diabetes. Also, General Motors (GM) remains under fire after the automaker announced earlier this week that it was recalling an additional 1.5 million vehicles due to faulty power steering problems that have caused more than 13 fatal accidents.

Our 10 ETFs in the Spotlight inched higher with 7 of them making new highs today; 9 of them are now on the plus side YTD.

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On April Fool’s Day The S&P 500 Rises To Record

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

On this very April Fool’s day, domestic equities rallied for the second day in a row, powered by consumer and technology stocks, and pushed the benchmark S&P 500 to an all-time high as the chart above shows.

Optimism prevailed as the ISM index rose in March indicating that the economy may not have suffered as much as a result of the harsh winter conditions as had been assumed. Further helping upside momentum were comments from new Fed chief Yellen yesterday that monetary stimulus would be needed for “some time” due to “considerable slack” in the labor market.

That’s all it took and up we went. The S&P 500 finally managed to close above the 1,880 level after having nibbled on it several times over the past few sessions. While the month of March was a mixed bag for some areas, especially tech and small caps, the benchmark indexes SPY and RSP held up well supporting the long-term bullish trend.

Our 10 ETFs in the Spotlight headed higher with 5 of them making new highs today; 9 of them are now on the plus side YTD.

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First Quarter Was Shaky; But Ends On A Positive Note

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The first quarter of 2014 has officially come to a close. The first three months of the year rattled investors to say the least. From tensions between Russia and the West over Ukraine and the winter storms that froze the U.S. economy in January and February. As a result, investors focused their attention on buying and holding “safe” investments, such as bonds, dividend-paying stocks, and gold.  It is safe to say that, given all of the volatility, we remain in a good spot moving towards Q2.

Here are the final 2014 first-quarter returns for the major U.S. stock indexes: S&P 500: +1.3%, Russell 2000: +0.8%, Nasdaq composite: +0.5%, Dow Jones Industrial Average: -0.7%.

Riskier growth-oriented stocks, particularly in biotechnology, consumer discretionary and technology stocks, fared the worst this quarter, while utility and health care stocks (i.e. dividend paying stocks) rose 9% and 5.5% respectively.

In M&A news, healthcare giant Johnson & Johnson Co. (JNJ) has accepted a $4.15 billion offer from private-equity giant Carlyle Group L.P. (CG) to acquire its Ortho-Clinical Diagnostics business. Johnson & Johnson, like other major drug makers, has been divesting non-core businesses and cutting costs amid generic competition.

Our 10 ETFs in the Spotlight rallied along with 4 of them making a new high today; 9 of them are now on the plus side YTD.

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ETFs/Mutual Funds On The Cutline – Updated Through 03/28/2014

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 364 (last week 356) 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. 75 ETFs (last week 67) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 696 (last week 727) above the line and 153 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: Is The Debt Overhang Delaying The US Recovery?

Ulli Market Review Contact

92835431US interest rates are expected to rise in the middle of 2015 or even later, though it would probably be appropriate to hold them lower a little longer than that, said Federal Reserve Bank of Chicago President Charles Evans. A lot will depend upon the data and how quickly inflation moves up to the central bank’s target of 2 percent, Charles said.

Asked if the US economy could hit the targeted 2 percent inflation rate sometime in 2015 given the difficulties in stimulating demand, Charles said his own expectation is that inflation is going to be one and three-quarters in 2016. There’s hope the economy will get a lift in inflation and expectations are closer to the 2 percent objective, though actual inflation expectation about is 1.1 percent or 1.75 percent depending upon how one massages the data.

Cost pressures are minimal for raw materials and labor, and there’s no cost-push that could lift prices. A stronger economy is needed to get wage pressures moving and have that passed on in the form of higher inflation, which probably could happen in 2016 and beyond, he noted.

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