Last Week In Review: ETF News And Blog Posts To 3/10/2013

Ulli Market Review Contact

In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 3/10/2013.

Upward momentum picked up speed again, as the benchmark S&P 500 index gained every day this week for a total of +2.17% since last Friday’s close.

Bond prices have been slipping, meaning rates have been inching up on the idea that the economy is improving. The Fed’s beige book report provided no earth shattering news, but it has become clear that the Fed, despite recent questionable remarks, has in no way admitted that the QE gravy train may be slowing down. I think their recent comments were merely designed to test market response, kind of like a canary in the coal mine, in the event the monthly $85 billion money spigot would be slowed down.

In my view, the Fed is stuck between a rock and a hard place. They eventually will have to stop the print fest, but if they do too soon, the markets will tank. In the meantime, adding $85 billion a month will support the major indexes if for no other reason that money needs to find a home. One analyst quipped that “in 2013 we may see the S&P 500 go above 2,013.”

Over past week, we covered the following:

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One Man’s Opinion: Will Sequestration Hurt Job Creation And Temper Growth?

Ulli Market Commentary Contact

151546377Friday’s nonfarm payrolls number certainly comes as a welcome break for investors who have been worried that the Fed’s ultra loose monetary policy has failed to stimulate the real economy.

However, the pace of recovery is likely to slow down, says Alan Krueger, chairman of the White House Council of Economic Advisers, adding the so-called sequestration is going to hurt just when economic recovery is gaining traction. Sequestration is going to make some important spending-cuts which are going to hurt investment and people, and will ultimately slow economic growth and job creation, which is why President Obama had suggested a balanced approach of reducing the budget deficit by closing tax loopholes, reforming entitlements and smarter entitlement cuts, he argued.

Asked to assess the impact of sequestration on jobs growth, Alan said there are number of estimates out there. The Congressional Budget Office expects the GDP growth to slow down by 0.6 percent and reduce employment by three quarters of a million jobs, which turns out about 75,000 jobs every month because the sequester starts from March, so there’s just ten months for rest of the year.

When prodded to give his own calculations, Alan said the CBO’s forecast seems to be a reasonable estimate to him.

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New ETFs On The Block: First Trust High Yield Long/Short ETF (HYLS)

Ulli Long/Short ETFs Contact

88338768First Trust Advisors, the Illinois-based provider of exchange traded funds (ETFs), has unveiled the First Trust High Yield Long/Short ETF (HYLS), an actively managed high-yield bond ETF designed to provide investors with capital appreciation and current income.

Investors worried about an interest rate hike later this year or next year, can consider this product for hedge against interest rate risk. Furthermore, due to the low historical correlation between high-yield securities and traditional fixed-income instruments, addition of high-yield securities to a well-diversified portfolio may lower overall risk and improve returns.

HYLS tracks the Bank of America Merrill Lynch US High Yield Master II Constrained Index and invests primarily in a diversified portfolio of below investment-grade or unrated debt securities, including US and non-US high-yield bonds, bank loans and convertible bonds.

The fund will invest at least 80 percent of net assets in junk securities. Additionally, it may invest up to 10 percent of net assets in non-US securities in non-US dollar denominated currencies. HYLS can also invest in non-income producing securities including distressed securities (distressed companies face uncertain and troubled conditions and may be involved in reorganizations, restructurings and bankruptcy proceedings) and common stocks though there is a 15 percent cap (upper limit) on investment in distressed securities.

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03-08-2013

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, March 8, 2013

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2013/03/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-03072013/

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Market Commentary

Friday, March 8, 2013

MARKET INDEXES GAIN MORE THAN 2 PERCENT FOR THE WEEK; EUROPE RISES ON US JOBS DATA

US indexes notched weekly gains of more than 2 percent as the Dow Industrials and the S&P 500 closed higher for the sixth straight trading session, after data showed employers added more jobs than forecast last month and unemployment rate fell to a four-year low.

Friday’s job report capped off a string of positive labor reports that gave investors reason to believe that the economy is finally on a firmer footing and may weather a combination of payroll tax hikes and federal spending cuts.

Labor Department report in Washington showed employment rose 236,000 last month after a downwardly revised 119,000 gain in January. Economists had forecast a job gain of about 165,000. Jobless rate fell to 7.7 percent in Feb. from 7.9 percent the month before as hiring in construction jumped the most in nearly six years.

Separately, a Commerce Department report showed inventories at the wholesale level rebounded sharply in January, rising 1.2 percent in the biggest jump since Dec 2011.

Global stocks rallied earlier after the Japanese Cabinet Office said gross domestic product expanded at an annualized 0.2 percent in the fourth quarter, bettering a preliminary estimate that showed the world’s third largest economy contracted 0.4 percent during the period.

The Dow Jones Industrial Average (DJIA) added 68 points for the day to finish at 14,397, capping its weekly gain at 2.2 percent.  The S&P 500 Index (SPX) rose 7 points to 1,551 with consumer discretionary fronting the gains. All the 10 business groups within the benchmark index finished higher for the day. The S&P 500 is up 2.2 percent for the week and only 14 points from its all-time record, which, with continued money pumping, should be taken out very shortly.

Treasury prices dropped, pushing 10-year yields to an 11-month high after reports showed US employers added more jobs than forecast and jobless rate fell, indicating the Fed’s accommodative monetary policies are starting to stimulate the real economy.

The US dollar advanced against majority of its most-traded rivals Friday after February nonfarm payrolls beat expectations and jobless rate fell unexpectedly.

Meanwhile, European stocks rallied on strong US nonfarm payrolls data Friday, notching their biggest weekly gain in two months.

The pan-European Stoxx Europe 600 index rose 0.8 percent to end at 295.55, extending gains into a third week and marking the highest level since June 2008. The benchmark has added 2.3 percent for the week and gained 5.7 percent so far this year.

Enthusiasm was tempered early after Fitch Ratings agency downgraded Italy by one notch citing political instability after the recently held inconclusive elections. But investors soon found inspiration from Asia after data released by Chinese customs administration showed exports increased 21.8 percent in Feb. from a year earlier, beating estimates of an 8.1 percent decline.

Our Trend Tracking Indexes (TTIs) moved higher with the major indexes and deeper into bullish territory. For the week, here’s how we ended up:

Domestic TTI: +3.29% (last week +3.10%)

International TTI: +10.24% (last week +8.56%)

Have a great week.

Ulli…

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READER Q & A FOR THE WEEK

All Reader Q & A’s are listed at our web site!
Check it out at:

http://www.successful-investment.com/q&a.php

A note from reader Steve:

Q: Ulli: Can you provide a basic explanation of your momentum (M-Index) without giving away your proprietary method?

A: Steve: All terms are described in the Glossary section, which is posted on the top of every StatSheet. In case you missed it, you can read it here:

http://www.successful-investment.com/GlossaryOfTerms.pdf

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WOULD YOU LIKE TO HAVE YOUR INVESTMENTS PROFESSIONALLY MANAGED?

Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly or get more details at:

https://theetfbully.com/personal-investment-management/

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Back issues of the ETF/No Load Fund Tracker are available on the web at:

https://theetfbully.com/newsletter-archives/

ETF/No Load Fund Tracker Newsletter For Friday, March 8, 2013

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2013/03/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-03072013/

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Market Commentary

Friday, March 8, 2013

MARKET INDEXES GAIN MORE THAN 2 PERCENT FOR THE WEEK; EUROPE RISES ON US JOBS DATA

US indexes notched weekly gains of more than 2 percent as the Dow Industrials and the S&P 500 closed higher for the sixth straight trading session, after data showed employers added more jobs than forecast last month and unemployment rate fell to a four-year low.

Friday’s job report capped off a string of positive labor reports that gave investors reason to believe that the economy is finally on a firmer footing and may weather a combination of payroll tax hikes and federal spending cuts.

Labor Department report in Washington showed employment rose 236,000 last month after a downwardly revised 119,000 gain in January. Economists had forecast a job gain of about 165,000. Jobless rate fell to 7.7 percent in Feb. from 7.9 percent the month before as hiring in construction jumped the most in nearly six years.

Separately, a Commerce Department report showed inventories at the wholesale level rebounded sharply in January, rising 1.2 percent in the biggest jump since Dec 2011.

Global stocks rallied earlier after the Japanese Cabinet Office said gross domestic product expanded at an annualized 0.2 percent in the fourth quarter, bettering a preliminary estimate that showed the world’s third largest economy contracted 0.4 percent during the period.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 03/07/2013

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, March 7, 2013

Table of Content082312

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

TTI

The domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our Trend Tracking Index (TTI—green line in above chart) has bounced off its long term trend line (red) by +3.43% as part of the post election rebound.

To avoid a potential whip-saw, a Sell signal to move out of all domestic equity positions will be generated once we have clearly pierced the line to the downside. Be sure to tune into my blog for the latest updates.

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