Markets Well-Rested After Holiday Weekend

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Apparently, investors and traders across the board were well rested when the markets re-opened today, because the major indexes roared all day and the S&P 500 advanced to close at a record high for the second trading day. The Dow gained 0.42% and the Nasdaq rose 1.22% on the day. The large gains on the day were mostly attributed to positive M&A activity, as well as a more entrenched hint that the European Central Bank will be lowering interest rates in the near future.

Hillshire Brands (HSH) has been in the news recently as a potential acquirer of Pinnacle Foods (PF) for $4.2bil. However, there is always a bigger fish in the sea and today the hunter became the hunted after we received a report that Pilgrim’s Pride (PPC) is offering to buy Hillshire for $6.4bil. Investors reacted extremely positive to this news and shares of Hillshire gained more than 22% to $45.19. Obviously, Hillshire needs to think long and hard which route it will take.

We also heard from Mario Draghi (ECB President). He believes pre-emptive action, such as a rate cut or quantitative easing, may be needed to tackle any risk of deflation. He also noted that the ECB is preparing a package of policy options for its June meeting, including cuts in all its interest rates as well as targeted measures aimed at boosting lending to small- and mid-sized firms.

Our 10 ETFs in the Spotlight joined the index rally with 3 of them making news highs; 9 of them remain on the plus side YTD.

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ETFs/Mutual Funds On The Cutline – Updated Through 05/23/2014

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 359 (last week 338) 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. 82 ETFs (last week 81) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 625 (last week 591) above the line and 224 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 The European Central Bank Initiate Quantitative Easing In June?

Ulli Market Review Contact

92835431The Purchasing Managers Index numbers in the 18-member euro zone were disappointing but were equally consistent with an annual growth forecast of about 1.5 percent, which, if achieved, would be great in what has been witnessed in the euro land generally, said James Bevan, Chief Investment Officer at CCLA Investment Management.

It is likely that the euro-area will witness a sustained pick-up in growth in the second half of the year, and it’s absolutely safe to say a second-quarter bad news is now “baked in the cake” and acceleration is on the curve, he added.

Asked why his portfolio is overweight on equities and underweight on fixed-income, James said investors need to understand first why fixed income has done so well this year. Growth in the currency-bloc has been disappointing in the first quarter and they are likely to be disappointing again in the second quarter. The real issue, however, is whether yields in the bond market are below the rates of inflation. On that basis investors are simply burning money by staying in the fixed-income asset class.

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New ETFs On The Block: iShares Qatar (QAT) And United Arab Emirates ETFs (UAE)

Ulli International ETFs Contact

91551519The Middle East has often been ignored by exchange traded fund issuers of the world though the region gained in economic prominence with the surfacing of the so-called Frontier Markets.

Among the frontier markets, Qatar and United Arab Emirates have been outperforming, and the international investor community was quick to recognize their emergence. Also, Qatar’s winning the hosting rights of the soccer World Cup in 2022 underscores the region’s growing importance beyond just oil and gas.

Before Qatar and the UAE officially get promoted to emerging markets from frontier markets by Morgan Stanley on May 30, iShares, the world’s largest issuer of ETFs and an arm of BlackRock, launched two funds focused on the two fast-growing Middle East equity markets. The iShares MSCI Qatar Capped ETF (QAT) and the iShares MSCI UAE Capped ETF (UAE) were launched weeks before the promotion of these two OPEC members to EM category.

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05-23-2014

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For May 23, 2014

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2014/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05222014/

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Market Commentary

Friday, May 23, 2014

S&P REACHES NEW HEIGHTS HEADING INTO HOLIDAY WEEKEND

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The benchmark S&P 500 set a new closing high today, settling above the 1,900 mark for the first time. U.S. stocks rallied based on earnings and housing data. The day’s gains held, contrary to beliefs there might be selling pressure before the close as U.S. investors headed into a three-day weekend

We heard earnings announcements from Hewlett-Packard (HP) today. Shares jumped 6.1% after reporting fiscal second-quarter earnings that met expectations on sales that slightly under-performed. This news may sound great for investors, but HP also informed us today that it would cut an additional 11,000-16,000 jobs on top of 34,000 previously announced.

For the week, all indexes rose after a taking a breather on Tuesday, as you can see from the above 5-day chart. The Nasdaq ended up being the clear winner.

The meager week for economic data showed that improvement in economic growth continues, slowly but surely. Existing home sales rose 1.3% in April from March, the first increase this year, and new home sales jumped 6.4% in April from March, the largest increase in six months.

Our 10 ETFs in the Spotlight headed higher as well; one new high was made today and 9 of them remain on the plus side YTD.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

In other words, none of them ever triggered their 7.5% sell stop level during this time period, which included a variety of severe market pullbacks but no move into outright bear market territory.

Here are the 10 candidates:

MaxDD

All of them are in “buy” mode, meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

Year to date, here’s how the above candidates have fared so far:

YTD

To be clear, the first table above shows the position of the various ETFs in relation to their respective long term trend lines (%M/A), while the second one tracks their trailing sell stops in the “Off High” column. The “Action” column will signal a “Sell” once the -7.5% point is taken out in the “Off High” column.

3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) joined the rebound and moved deeper into the bullish side of their respective trend lines:

Domestic TTI: +2.71% (last Friday +2.09%)

International TTI: +3.73% (last Friday +3.01%)

Have a great weekend.

Ulli…

Disclosure: I am obliged to inform you that I, as well as advisory clients of mine, own some of these listed ETFs. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the guidelines specified.

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READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

A note from reader Jack:

Q: Ulli: Given the fact that the markets are hovering in record territory, with the S&P attempting to break through the 1,900 level, what’s your view of bonds in this environment?

A: Jack: If you look at the Total Bond Market index BND, which I don’t own, you’ll see that bonds indeed recovered this year, have come off their lows and broken above their respective long-term trend line into bullish territory.

Still, I think the place to be is equities. If you are looking to get some income while participating in growth, DVY, which we own, has a 2.98% yield and is a member of the 10 ETFs in the Spotlight, which I feature daily in the market commentary. That means it has fairly low volatility, but you still need to guard against unforeseen market drops by applying my recommended sell stop discipline.

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WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

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Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/

ETF/No Load Fund Tracker Newsletter For May 23, 2014

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2014/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05222014/

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Market Commentary

Friday, May 23, 2014

S&P REACHES NEW HEIGHTS HEADING INTO HOLIDAY WEEKEND

Fri pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The benchmark S&P 500 set a new closing high today, settling above the 1,900 mark for the first time. U.S. stocks rallied based on earnings and housing data. The day’s gains held, contrary to beliefs there might be selling pressure before the close as U.S. investors headed into a three-day weekend

We heard earnings announcements from Hewlett-Packard (HP) today. Shares jumped 6.1% after reporting fiscal second-quarter earnings that met expectations on sales that slightly under-performed. This news may sound great for investors, but HP also informed us today that it would cut an additional 11,000-16,000 jobs on top of 34,000 previously announced.

For the week, all indexes rose after a taking a breather on Tuesday, as you can see from the above 5-day chart. The Nasdaq ended up being the clear winner.

The meager week for economic data showed that improvement in economic growth continues, slowly but surely. Existing home sales rose 1.3% in April from March, the first increase this year, and new home sales jumped 6.4% in April from March, the largest increase in six months.

Our 10 ETFs in the Spotlight headed higher as well; one new high was made today and 9 of them remain on the plus side YTD.

Read More