Markets Remain Sensitive Amid International Concerns

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

It was not a good day for U.S. stocks as they fell broadly today, with the Dow and S&P 500 suffering their worst day of trading since early February. The blame is being put on rising concerns over Ukraine and Russia, as well as new indications of a slowdown in China. China’s economy slowed markedly in the first two months of the year, as growth in investment, retail sales and factory output all fell to multi-year lows. The stream of lackluster Chinese data continues. Figures overnight showed Chinese industrial output in January-February rose 8.6% from a year earlier but was down from 9.7% in December. Retail sales for the same period were also higher, but failed to meet expectations.

The Ukraine and Russia standoff is not helping markets one bit. Lawmakers in Ukraine have voted unanimously to create a National Guard of 60,000 or more volunteers amid their worries that Russian troops have amassed themselves near the border between the two countries ahead of a Sunday referendum in Crimea on whether citizens want to join Russia. Plus, there was a rumor that Russia started shooting today. Remember that with markets at all-time highs there is heightened sensitivity to any piece of bad news.

While the international landscape seems a bit shaky, things are on the up and up here at home. U.S. retail sales rebounded in February and new filings for jobless benefits hit a fresh three-month low last week, suggesting the economy was regaining strength after an abrupt slowdown caused by severe weather.

Retail sales increased 0.3% last month, with receipts rising in most categories, the Commerce Department said. The gain followed a 0.6% drop in January and ended two straight months of declines. In a separate report today, the Labor Department said initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 315,000 last week. That was the lowest reading since late November.

Our 10 ETFs in the Spotlight slipped with the indexes but 7 of them are currently showing gains YTD.

Read More

Investors Timid On Mediocre China Data

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

For much of trading today, the U.S. stock market appeared to be headed for its third decline in three days. By late afternoon though, the indexes began to slowly recover its losses as investors bought up oil refiners, mining companies and tech stocks. Afternoon activity was just enough to nudge the S&P 500 and Nasdaq into positive territory to close out the day. Six of the 10 industry sectors in the S&P 500 index notched small declines, with industrials posting the biggest drop. Utilities paced other gainers, as investors moved money into the relatively low-risk sector. The three major indexes are still down for the week, after a record setting performance the week before.

The news that we received over the weekend that China’s exports dropped substantially in February has raised investor’s eyebrows to say the least. Commodities such as copper and iron ore have dropped substantially over the past couple of days, with copper near its lowest level since 2010. Occasional weak data news coming out of China is nothing new; however, the thing to remember is that markets are at an all-time high and are thus much more sensitive to any kind of negative news.

Bad news from China did not stop investors from making heavy investments in oil refiners today. Leading the S&P 500 was Tesoro Corp. (TSO), posting gains of 4.07%. Valero Energy Corp (VLO) also posted notable gains of 3%.

Investors await the next round of market moving news that will come out on Thursday, when new data on retail sales and weekly unemployment benefit applications are released. On Friday, a survey of consumer confidence should give traders a better sense of how Americans feel about the economy.

Our 10 ETFs in the Spotlight went pretty much sideways with none of them making new highs today but 7 of them currently showing gains YTD.

Read More

Slipping And Sliding

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

It was a choppy and sloppy session as the S&P 500 headed into record territory early on but was not able to hold on to those gains.

The day was light in regards to economic data but confusion reigned as releases showed a mixed picture with the labor market on one hand demonstrating improvement, as job openings indicated a better than expected demand.

On the other hand, the negative influence was the fact that wholesale inventories increased meaning that businesses could not sell their goods as quickly as had been assumed. This proved to be the nail in the coffin for the indexes as we slowly slid towards the close. Not helping matters was a slide in copper and oil prices due to concerns about the Chinese economy.

Our 10 ETFs in the Spotlight pulled back as well with none of them making new highs today but 7 of them currently showing gains YTD.

Read More

Markets Affected By China Data, But Bulls Continue To Charge Forward

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Wall Street fell Monday morning, a day after the current bull market’s fifth anniversary, weighed down by unexpectedly weak trade data from China, which resulted in a halt to the market’s record performance. Data out over the weekend showed that Chinese exports in February dropped 18.1% from a year ago, versus expectations of a 5% increase. Some economists say that the data is distorted by the long Lunar New Year that took place at the end of January.

In equities, Green Mountain Coffee Roasters Inc. (GMCR) announced its decision to change its name to Keurig Green Mountain, Inc to reflect its current business and goal in the future. It will remain trading its stock under the ticker symbol “GMCR” at the Nasdaq stock exchange. Last month, GMCR announced the completion of its transaction with The Coca-Cola Company (KO). The beverage giant agreed to acquire a minority stake in the specialty coffee company for $1.25 billion. The stock closed the day down about 1.9%.

We received a strong indication from the Fed today that they will continue to wind down their bond buying program. Charles Evans, president of the Chicago Fed, stated that the Federal Reserve will continue to trim its monthly asset purchases at a rate of $10 billion. With the bond buying winding down, the Fed’s more immediate challenge is re-writing a pledge to keep rates near zero until well after the unemployment rate falls below 6.5 percent. Because joblessness has fallen quickly to 6.7 percent, policymakers are debating how to adjust that pledge without giving the impression they will tighten policy any time soon.

Our 10 ETFs in the Spotlight pulled back slightly with none of them making new highs today but 8 of them are currently showing gains YTD.

Read More

ETFs/Mutual Funds On The Cutline – Updated Through 03/07/2014

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 371) 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 93 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. 73 ETFs (last week 74) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 769 (last week 752) above the line and 80 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: Does US And European Corporate Credit Still Look Attractive?

Ulli Market Review Contact

9283543110-year US Treasury yields have remained range-bound since June last year and the trading range has been very clear, varying between 2.5 and 3 percent, suggesting borrowing is back, said Anthony Crescenzi, a portfolio manager at PIMCO.

The US economic growth is expected to accelerate to about 2.8 percent this year from the low twos that has been the norm for a number of years. The US 10-year yields are expected to slowly rise as the monetary policy normalizes and is likely to trade between 2.75 percent and 3.75 percent in future, meaning investors should be a little bit short in maturities expecting rates to rise and be in the front-end of the yield-curve.

With the shorter maturities, the Fed is protecting the investors and is indicating it will be doing so for at least till the middle of 2015, as one key Fed member – William Dudley of New York Federal Reserve Bank said recently, he observed.

Read More