J.C. Penny Layoffs; India To Construct World’s Largest Solar Plant

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

One of the biggest news items today was that J.C. Penny (JCP) announced (just after the market closed) it will be closing 33 stores and cutting 2,000 jobs. The cuts will essentially result in cost savings of about $65 million according to Chief Executive Mike Ullman. The stock was down 0.86% today and has continued to slide in after-hour trading. It will be interesting to see the markets reaction during Thursday’s normal trading hours.

In the tech world, most stocks gained today with notable attention being paid to Apple’s CEO Tim Cook reporting on the company’s partnership with China Mobile Ltd. Apple’s (AAPL) stock finished the day up 2%. Twitter (TWTR) and Microsoft (MSFT) also performed well today, closing at +5.8% and 2.7% respectively.

Today was a sunny day for solar in India as the Guggenheim Solar ETF (TAN) reached a new 52-week high early on in trading. The news that India is constructing the world’s largest solar plant entailed bullish sentiment from investors and the ETF is now trading about 2% higher than it was at the open of trading today. India has never been a major player in Solar and does not even have an indigenous solar industry.

Our 10 ETFs in the Spotlight joined the continued rebound with 5 of them now having moved into the plus column YTD.

Read More

Equities Rebound As Tesla Blazes A Trail

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Stocks rebounded today which resulted in the S&P 500 posting its largest gain so far this year.  Positive market sentiment today seemed to rally around the Fed’s Richard Fisher and Charles Plosser optimistic economic recovery as they expressed continued support for the central bank tapering.  However, many investors seem to feel that a stronger U.S. economy could lead to the Fed dialing back the stimulus at a quicker pace, which would not bode well for the equity market.

One of the largest movers of the day was Tesla Motors (TSLA), which surged 16% and experienced 2x normal trading volume as it announced that it sold 20% more cars in Q4 than anticipated.  Also today, JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) released their quarterly earnings, which actually beat expectations but only resulted in minimal gains in their stock price.

The dollar gained against the yen, but gained no ground against the euro.

2014 is still going well for Gold it seems as the Direxion Daily Jr Gld Mnrs Bull 3X Shrs (JNUG) leads the pack in YTD return with 36.28%. Trailing not far behind in the #2 spot of largest YTD return is the Velocity Shares 3x Inverse Crude ETN (DWTI), which has realized a 23.07% return.

Yesterday’s market anxiety vanished as our 10 ETFs in the Spotlight picked up steam and recovered most of their losses.

Read More

Stocks Slump, But Corn Looks Tasty!

Ulli Market Commentary Contact

Mon pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

U.S. stocks experienced a late day sell off that brought the benchmark indexes to a 4-month low. The sell-off was primarily a reaction to the weak December jobs report and the Fed’s comments about further reducing the stimulus. The December jobs report claimed that only 74,000 jobs were added in December, which was the smallest gain in three years. Investors may also be a bit on edge in anticipation of earnings releases from a number of large banks tomorrow.

On a positive economic note the Fed recorded a $53 billion budget surplus in December, which brings the government’s budget deficit down to $174 billion for Q1.

Google (GOOG) saw a 0.5% jump today as news spread that they are acquiring Nest Labs Inc., which develops technology for home automation (such as energy-efficient thermostats and smoke/carbon dioxide alarms).

It was all about Corn today in the ETF market.  2013 was a terrible year for the corn market as investors saw the Teucrium Corn ETF (CORN) drop by roughly 30% in 2013. After a horrendous 18 months however things might be looking up for corn. The (CORN) ETF soared in Friday trading and finished strong Monday, as the government’s report surprised the market with a reduction in corn yields.

While the anxiety in the markets caused our ETFs in the Spotlight to slip along with the indexes, it did not affect their long-term direction as the second table below shows.

Read More

ETFs/Mutual Funds On The Cutline – Updated Through 01/10/2014

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 324 (last week 317) 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. 62 ETFs (last week 61) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 703 (last week 679) above the line and 146 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: Are Industrials Likely To Outperform If GDP Grows At Three Percent Or More?

Ulli Market Review Contact

92835431The growth environment is getting better, and it may surprise in terms of its strength. As that happens, the Fed is going to get a little bit more concerned about their policy, said David Joy, Chief Market Strategist at Ameriprise Financial. The market is going to anticipate that inflation is going to rise a little bit. Clearly the Fed is in a shifting mode and, as a result, equities are going to struggle when the liquidity environment starts to deteriorate despite an improved operating environment, he observed.

Asked if he would stay overweight in equities, David said investors should remain overweight in equities, at least relative to bonds. But, at the same time, there will be a market correction at some point when investors start to get concerned about the future Fed policy.

That would be a better entry point and investors may decide to hold a higher cash balance, i.e. if normally cash comprises 5 percent of total asset holdings, investors may decide to increase it to 10-20 percent. However, it’s difficult to predict when correction will happen, though it’s certain to happen some time this year, he argued.

Read More

New ETFs On The Block: Wisdomtree Japan Interest Rate Strategy Fund (JGBB)

Ulli Country ETFs Contact

91551519Japanese stocks have performed exceedingly well since Prime Minister Shinzo Abe initiated reformative initiatives earlier last year to boost the economy. The so-called “Abenomics” that mandated structural reforms and easy monetary policies, boosted investor confidence in Japanese equities, making Japan the best-performing developed market in the world.

Japanese stocks surged 56.7 percent in local currency terms last year as the yen tumbled and the Nikkei 225 index broke above a long-term downtrend line for the first time since early 1990s.

The Bank of Japan has been pumping liquidity in the economy and has been expanding the monetary base at an annual rate of about 60-70 trillion yen. The BoJ’s bond buying spree has kept a lid on the yields of Japanese Government Bonds (JGB) and, according to BoJ Governor Haruhiko Kuroda, interest rates will start to rise once inflation hits the central bank’s target of 2 percent.

Read More