Bulls March On Powered By Good Data

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

Domestic stocks rallied to close higher for a second-straight session, led by automakers and technology companies, as a Senate panel voted to authorize military action in Syria and on the heels of the Federal Reserve releasing an upbeat Beige Book report.

The S&P 500 settled higher after regaining its 100-day moving average shortly after the open. About 6.1 billion shares changed hands on U.S. exchanges today, slightly below the daily average so far this year.

The major automakers reported U.S. August sales today, with Chrysler’s, Ford’s, and General Motor’s sales rising at least 12.0% y/y, all beat out analysts’ growth expectations. Today’s numbers marked the strongest month since October 2007. Meanwhile, the Federal Reserve also released its Beige Book, a summary of anecdotal economic data from all twelve Fed districts.

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7 ETF Model Portfolios You Can Use – Updated through 9/3/2013

Ulli Model ETF Portfolios Contact

More uncertainty about the potential engagement in Syria caused the major indexes to fluctuate sharply on an intraday basis, as early rallies were offset by mid-day selloffs, which were followed by late day rebounds.

In the end, the S&P 500 managed to eke out a gain of +0.61% since last week’s ETF model portfolio report. Besides continuous war talk, the markets will have to deal with this Friday’s upcoming nonfarm payroll report (NFP), along with the unemployment figures. If these numbers come in close to as expected, chances are enhanced that the Fed will follow through with reducing their QE efforts, although the time table may be uncertain.

If the NFP disappoints hugely, odds are that “tapering” is off the table, which may give the markets a much hoped for boost. No one knows how the dice will fall, but with our Domestic TTI only hovering less than 1% above its long-term trend line, we could exit our holdings fairly soon should adverse market news hit the tape.

Here’s the latest ETF Model Portfolio update:

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Major Indexes Edge up Cautiously On Upbeat Economic Data

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

U.S. equities bounced off afternoon lows to finish in the positive but were far off session highs in choppy action, as investors received many market moving news. Catalysts included upbeat manufacturing reports out of the U.S., China, and Europe with the increasing likelihood of a US-led military response toward Syria, as House Speaker Boehner said that he supports the President’s plan.

M&A reports also dominated the equity headlines, with Dow member Verizon Communications agreeing to acquire Vodafone Group’s stake in Verizon Wireless for $130 billion, while fellow Dow component Microsoft said it will purchase Nokia’s cellphone business for $7.2 billion. In other deal-making news, CBS Corp and Time Warner Cable reached a programming agreement, while Jarden Corp inked a deal to buy Yankee Candle for about $1.75 billion in cash. Today’s participation marked an improvement over most August sessions as nearly 800 million shares changed hands on the floor of the New York Stock Exchange.

The S&P 500 rose more than 1 percent in early trading after Obama sought congressional authorization before taking military action, a move seen likely to shelve any strike for at least several days. The early gains did not hold past the initial two hours as late-morning comments from House Speaker John Boehner and Majority Leader Eric Cantor.

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ETFs/Mutual Funds On The Cutline – Updated Through 8/30/2013

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 272 (last week 300) 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. 50 ETFs (last week 54) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 752 (last week 779) above the line and 107 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: Should Fixed-Income Investors Focus On Short-Duration Bonds?

Ulli Market Review Contact

92835431Equities and bonds have been moving in lock-step recently, which is rather unusual since they tend to move in opposite directions because they are negatively correlated. If stocks fall due to geopolitical tensions, bonds tend to rally, giving investors some protection, said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC.

For the few weeks in late July and early August, the correlation turned positive for the first time since the European crisis. One of the challenges of such a situation is that it increases the overall risk of investors’ portfolio because both asset classes move in the same direction in unison, Guy noted.

Asked if he would attribute it to the Fed’s taper talk, Guy answered in affirmative. The Federal Reserve basically increases the value of all assets by entering into quantitative easing or cutting interest rates because investors then can buy any assets due to excess liquidity in the system. The reverse order follows when they get ready to wind down stimulus, he explained.

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New ETFs On The Block: First Trust Multi-Asset Diversified Income Index Fund (YDIV)

Ulli Income ETFs Contact

71080438First Trust, the Wheaton, Illinois-based provider of exchange-traded products known for its niche strategies, has launched a non US-focused ETF that seeks to provide income sans volatility through a diverse international portfolio of high yielding securities.

The First Trust International Multi-Asset Diversified Income index Fund (YDIV) is the international version of the First Trust Multi-Asset Diversified Income Index Fund (MDIV) that the firm launched about a year ago.

The new fund will compete with similar products by SPDR (SPDR SSgA Income Allocation Fund), iShares (iShares Morningstar Multi-Asset Income Index Fund), Guggenheim (Guggenheim International Multi-Asset Income ETF) and ArrowShares (Arrow Dow Jones Global Yield ETF), and like its predecessor MDIV, will hold real estate investment trusts (REITs), master limited partnerships (MLPs), utilities, ETFs, fixed-income instruments and preferred stocks.

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