S&P’s Performance Bodes Well As We Head Towards March

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The S&P 500 had moved above its previous record many times this week, only to fade in the afternoon. After coming close, the index finally reached an all-time high today. Strong earnings from a number of U.S. companies, including the drugmaker Mylan and several retailers, provided just enough jet fuel to keep the S&P above the high water mark by closing. Some analysts feel that the positive market sentiment February has seen bodes well as we enter March, which has traditionally been one of the stronger performing months of the calendar year over the last 30 years.

Many investors were awaiting Janet Yellen’s speech today; however, there were no big shockers from the Chair of the Federal Reserve. Yellen’s comments did not indicate that the central bank could lower the pace of its stimulus reduction, so investors felt some relief that there were no negative surprises.

Japan’s Nikkei average fell for a second day on Thursday, moving further away from a four-week closing hit earlier this week. Many relate the recent decline to the heightened tensions in Ukraine that have impacted index heavyweights like SoftBank.

Oil prices dropped slightly today but held above $102 a barrel. Expectations for reduced demand due to warmer weather collided with a smaller-than-expected increase in U.S. oil supplies. Investors will be watching for new policy initiatives from China’s annual legislative session in early March to see what steps the government might take to shore up growth.

Our 10 ETFs in the Spotlight moved higher with the major indexes with 6 of them having turned positive for the year.

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Positive Housing Numbers Help Market Sentiment; Tesla Still On Fire

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Overall, the markets held up well today. By the end of trading some major indexes posted gains while others dipped slightly. Some analysts say that the S&P 500 may be hitting a key resistance level as we have seen the index approach, but fail to break through its all-time high over the past few days of trading.

We received some positive economic news today that may have helped drive market gains. New home sales numbers came in at 468,000 units (annualized) for the month of January, which was well above the forecast even as mortgage rates have increased slightly over the past few months. Employment numbers will be coming out over the next two days that will shed some light on initial and continuing jobless claims. So, keep an eye on how investors react to this data.

Well, once again Tesla (TSLA) is on fire. The stock gained another 3% today and has gained more than 30% since reporting much stronger-than-expected profit and raised sales targets last week. Tesla debuted on the stock market in 2010 at less than $20 a share. Tesla bulls are betting that Tesla will grow from a niche player to a full-scale automaker to rival Ford (F), Toyota (TM) and General Motors (GM). One bit of info driving investor sentiment is the fact that the company is expected to officially announce plans to open a new lithium battery factory, dubbed the “Gigafactory,” which a spokesman from Tesla said should have capacity equal to all factories making such batteries around the world.

Our 10 ETFs in the Spotlight went sideways with the major indexes with 5 of them having turned positive for the year.

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Equities Have A Flat Tuesday, But Where Did All The Bitcoins Go?

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks traded pretty flat for most of the day, and all the major indexes finished in the red zone.  Some analysts blame the February Consumer Confidence reading of 78.1, which was lower than the consensus of 80.1.

Macy’s (M) released some positive earnings numbers which showed profits increased 11% during the Q4 2013 holiday season.  The stock finished 6% higher on the day.  Tesla had another monster day.  Are you surprised?  This company just can’t help from stealing headlines these days.  Shares ended the day up another 14% after Consumer Reports rated the company’s Model S sedan as the best overall vehicle in its annual top ten list. Also boosting the share price was the fact that Morgan Stanley raised its target price on Tesla from $153 to $320 a share.

Today was a scary day for all those Bitcoin fanatics out there. The price of a Bitcoin plummeted more than ten percent after Mt. Gox, one of the largest trading exchanges disappeared. The exchange’s website has gone offline with no Tweet to be found. One rumor going around is that $350 million worth of Bitcoins have been stolen by hackers. In other tech news, LinkedIn (LNKD) opened its beta Simplified Chinese language site. The company mentioned it has around 4 million Chinese users on its English version website but estimates it can broaden its user base to 140 million Chinese users with the language upgrade. Shares gained 5.17 percent, closing at $209.90.

And finally over to Japan. The Japanese government announced details of a national plan that designates atomic power as an important long-term electricity source. The new Basic Energy Plan, which states Japan will push to restart reactors closed in the wake of the Fukushima disaster and suggests it might build new ones, contradicts a promise made by a previous government to phase out the country’s atomic power plants.

Our 10 ETFs in the Spotlight meandered with 5 of them having turned positive for the year.

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Markets Start Week With A Bang

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The U.S. markets started the week out with a bang.  The S&P 500 (SPX) hit an all-time intraday high of nearly 1,859.00 and finishing up 0.6%.  Gains were broad across the board, with nine of the ten S&P 500 sectors up on the day.  The market seems to be gaining momentum as it follows in suit with the big winners of 2013 (Google, Netflix, Tesla, Facebook, Priceline).  Also, sentiment has been bullishly responding to the abundance of M&A activity we have seen thus far.  To add to the list, today we heard RF Micro Devices Inc agreed to buy TriQuint Semiconductor Inc for about $1.6 billion, and Men’s Wearhouse Inc raised its cash tender offer for rival men’s clothing retailer Jos. A. Bank Clothiers Inc to $63.50 per share from $57.50.

Chesapeake Energy (CHK), the second-largest natural gas producer in the U.S., was a big gainer today. The stock rose 2.63% after the company announced it is considering selling or spinning off its oilfield services unit, Chesapeake Oilfield Services.

The average U.S. price for a gallon of regular gasoline at the pump has climbed for 17 days in a row. This marks a total increase of about 15 cents a gallon and AAA predicts that prices are likely to continue to rise in the weeks ahead as we head towards refinery maintenance season. For your information, this is the largest price increase since mid-July and the longest streak of daily increases since last May.

As the week progresses, I am looking ahead to Thursday when Federal Reserve Chair Janet Yellen will speak to the Senate Banking Committee in a semi-annual testimony about monetary policy.  Yellen has been a champion of the U.S. economy thus far in 2014, stating on numerous occasions that emerging market volatility is not a big risk to the U.S. and that the U.S. should continue reducing its bond buying program.

Our 10 ETFs in the Spotlight all showed gains and now 5 of them have turned positive for the year.

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ETFs/Mutual Funds On The Cutline – Updated Through 02/21/2014

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 357) 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. 72 ETFs (last week 70) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 708 (last week 692) above the line and 141 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.

Please note that Mutual fund prices have not been adjusted for yearend distributions.

One Man’s Opinion: Should The European Central Bank Have Done More To Boost Economies?

Ulli Market Review Contact

92835431The first eurozone composite Purchasing Manager’s Index reading for February came in at 52.7, falling short of the 53.1 that economists had called for. However, the services component of the index has improved by-and-large in most countries over the past few months and the latest reading (51.7 versus forecast of 51.9) is consistent with that, said Gilles Moec, European co-Chief Economist at Deutsche Bank AG.

The services sector improved faster because fiscal austerity is probably not as tough now as it was 2-3 years ago. There has been some normalization of domestic demand, which is reflecting in the services data. On the manufacturing front, things are a little more difficult though because it depends a lot on the type of traction available outside Europe.

Investors could be tempted to read the small dip in German manufacturing PMI as an indication of what’s going on in China (Chinese manufacturing PMI slipped deeper in the contractionary region for the second straight month in February). However, prudence is required since the relationship between German and Chinese manufacturing PMI is not linear though it’s a possibility.

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