US Stock Indexes Decline As Europe, Oracle Weighs; Europe Slides On German Data

Ulli Market Commentary Contact

Thur pic

[Chart courtesy of MarketWatch.com]

US stocks slumped today, posting there biggest slide in nearly a month, as weak eurozone economic data, the continued crisis in Cyprus and disappointing quarterly earnings of Oracle Corp. eclipsed better-than-estimated American economic data.

Early Thursday, the European Central Bank said it may cut off emergency funding to Cypriot banks if it fails to reach a bailout deal with international lenders by Monday as the island nation’s president Nicos Anastasiades struggled to forge agreement on a deal to stave off financial meltdown.

Speaking to the European parliament on Thursday, president of euro-zone finance ministers Jeroen Dijsselbloem, said the original proposal offered to Cyprus wasn’t dead yet and it’s difficult for the country to find alternatives; and so the saga continues.

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Fed’s ‘All-Clear’ Lifts US Equities; Europe Recovers From Cyprus Drop

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

Equities recovered from yesterday’s minor pullback, with the S&P 500 Index snapping its first three-day decline of the year, after the Federal Reserve said it would continue to support the US recovery (AKA continuing its relentless money printing efforts) while eurozone leaders mulled options for Cyprus.

Speaking to reporters at the conclusion of the two-day FOMC meeting, Fed Chairman Ben Bernanke said he didn’t find anything out of line with the stock market’s rise, citing growing optimism. Policymakers left the central bank’s $85 billion a month bond purchase plan unchanged as long as unemployment remains above 6.5 percent and inflation forecasts don’t exceed 2.5 percent.

The committee, however, lowered its expectations for the unemployment rate at the end of the year to a range of 7.3 – 7.5 percent, from an earlier forecast of 7.4 – 7.7 percent. Economic growth forecast for the year was revised down between 2.3 and 2.8 percent from an earlier estimate of 2.3 and 3 percent.

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7 ETF Model Portfolios You Can Use – Updated through 3/19/2013

Ulli Model ETF Portfolios Contact

Upside momentum slowed down as shown by the S&P’s short-term sideways pattern with the benchmark giving back 4 points since last Wednesday’s ETF Model Portfolio report.

While we came within 2 points of taking out the 2007 high, it was not yet to be, as the crisis in Cyprus pulled the major indexes off their highs, although Europe was much more affected than the US for the time being.

It’s too early to tell how that situation will play out, but the gauntlet, in form of the government attempting to reach into depositors’ bank accounts to remove money at will, has been thrown down with yet unknown consequences. Where I come from, we refer to that simply as theft.

Sounds to me that this is just a test to gauge population resistance and may very well be used again in the future by desperate and EU manipulated governments in dire need of funds. Right now, however, the Cypriot parliament has voted down this proposal, and we’ll have to wait and see how this story develops.

In the meantime, here is the latest update for our Model ETF Portfolios:

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Index ETFs Still Affected By Cyprus; European Stocks Slump On Concern Cyprus To Reject Bank Tax

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

US equity averages ended mixed with the Dow Industrials eking out a slight gain, and the S&P 500 Index extending its longest slump of the year as Cyprus’ rejection of a bailout levy eclipsed economic data that showed growth in new home construction.

Stocks retreated as lawmakers rejected an unprecedented levy on bank deposits, throwing into doubt a EUR 10 billion bailout deal for the island nation reached with the European Union just three days ago. The government proposed a revised bill Tuesday that would exempt savings under EUR 20,000, but the nation’s parliament still rejected it. The deal had sought to raise EUR 5.8 billion by drawing funds from private bank deposits in return for EUR 10 billion in bailout money.

Index ETFs pared losses later in the session after the European Central Bank reaffirmed its commitment to provide liquidity to Cypriot banks within the existing rules.

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Cyprus Drags Down Wall Street; Europe Bruised By Cyprus Bank-Deposit Levy

Ulli Market Commentary Contact

Mon Pic

[Chart courtesy of MarketWatch.com]

US indexes fell for a second day, after the Dow Industrials reached record highs last week as a controversial bank tax levied by euro-area leaders on Cypriot bank deposits in return for a bailout reminded investors Europe’s debt problems are far from over.

Equities fell hard at the start as investors grew worried by news that euro area finance ministers forced bank depositors in Cyprus to share in the cost of rescuing the island nation, reducing the cost of bailout by EUR 5.8 billion to EUR 10 billion.

A parliamentary vote on the proposed levy due to take place today was postponed. Cypriot banks are closed until Thursday, a government official said. Under an unprecedented provisional agreement, the European Union has proposed a one-time tax of 6.75 percent on private bank deposits of less than EUR 100,000 and 9.9 percent for those over that amount. Markets are worried, and rightfully so, that such levies will could be used in larger economies, such as Spain and Italy in the future.

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ETFs/Mutual Funds On The Cutline – Updated Through 3/15/2013

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 353 (last week 354) of them 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. 79 ETFs (last week 79) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 815 (last week 817) above the line and 44 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.