Can Jobs Data Be Better?

Ulli Market Commentary Contact

The latest employment data is significant and insightful, believes Mohamed El-Erian, chief executive officer and co-chief investment officer at the $1.8 trillion Pacific Investment Management Co. The report reveals three important developments. First, 171,000 new jobs were created because of two important events; the housing sector stabilizing and better consumer confidence.

The second important but less encouraging development; businesses remain hesitant which reflects in the hourly earnings data. The structural underpinnings have not improved though participation rate in the jobs market has gone up. Long-term unemployment has edged back over five million and youth unemployment remains stuck at 23.7 percent. Bottom line, good report but job growth not yet achieved escape velocity to put the unemployment crisis behind us, he noted.

Overall the economy has been improving and indicates a growth rate of about two percent. But within the economy, segmentation has taken place. The households are feeling better because of the improvement in the housing sector and higher consumer confidence while the business sector feels uncertain because of the political situation in Washington, Mohamed observed.

The government needs to do two things in the next few months; first remove the headwinds – settle the issue of fiscal cliff and second, produce tailwinds. The government needs to do away with some of the legacies of the financial crisis that is still undermining the recovery. The private sector is trying to move forward, but is hesitant because of these headwinds.

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New ETFs On The Block: Powershares S&P 500 High Dividend Portfolio (SPHD)

Ulli Dividend ETFs Contact

 

Invesco PowerShares, the Wheaton, Illinois-based ETF provider behind the popular S&P Low Volatility ETF (SPLV), has announced the launch of PowerShares S&P 500 High Dividend Portfolio ETF (SPHD), another factor-based fund that provides exposure to large- and mid-cap companies that have oversized dividend payouts and are less volatile than the broad market.

The fund tracks the S&P Low Volatility High Dividend Index, a benchmark of 50 stocks that identify high-yielding securities with low-levels of volatility. Targeted for income-seeking equity investors, the fund screens a high-yield basket of securities drawn from the S&P 500 universe.

The underlying index first selects 75 stocks from the S&P 500 index that have the highest dividend yield over the past 12 months with the number of stocks from each sector capped at 10. Then 50 stocks are selected from the group that have shown the least realized volatility based on the price returns data for the trailing 252 trading days. The weights of each of the 50 components are decided on their dividend yields.

According to the company, the underlying index had an average dividend yield of 4.5 percent at the end of third quarter, well above the broad bond benchmarks and other income focused securities. The fund is rebalanced and reconstituted twice a year, both in January and July.

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11-02-2012

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, November 2, 2012

ETF/No Load Fund Tracker StatSheet

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

https://theetfbully.com/2012/11/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-11012012/

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Market Commentary

Friday, November 2, 2012

US STOCKS SLAMMED AFTER THURSDAY’S RUN-UP; WORRY PREVAILS AHEAD OF PRESIDENTIAL ELECTIONS; EUROPE RISES ON US JOBS DATA

US equity indexes sank Friday to cap a truncated trading week with steep losses as cheer over better-than-expected employment data was offset by nervousness ahead of next week’s presidential election.

Markets were buoyed by employment data earlier that showed the US economy created more jobs than expected in October, the last significant piece of economic data before the country goes to the polls next week. Nonfarm payrolls gained by 171,000 in October, more than the 125,000 projected by most economists. Hiring also picked up faster than estimated in the preceding two months than previously believed, the report showed.

The unemployment rate, calculated from a separate survey of about 60,000 households, ticked higher to 7.9 percent from 7.8 percent in September, indicating a rise in labor force participation, which was in line with expectations.

After a 5.2 percent drop in August, factory orders climbed 4.8 percent in September. However, jitters soon gave way to optimism ahead of Tuesday’s presidential and Congressional elections.

After logging a 1.04 percent gain yesterday, the Dow Jones Industrial Average (DJIA) tumbled 139 points to finish at 13,093, off 0.1 percent for the week.  The S&P 500 Index (SPX) shed 13 points to close at 1,414 with energy and materials faring the worst and all the 10 industry groups finishing in the red. The index is, however, up 0.2 percent for the week.

Treasuries finished mostly flat, erasing losses posted earlier after an employment report showed jobs rising at a faster clip than estimated while average hourly earnings remained unchanged. The benchmark 10-year yield on Treasury notes ended unchanged 1.72 percent while yield on 30-year Treasury bond jumped two basis points to 2.92 percent.

The dollar rose Friday as the latest jobs data spurred doubts the US Fed may not extend its asset purchase program beyond what has been already committed to.

Meanwhile, across the Atlantic, European stocks got a boost on stronger-than-expected US jobs data. The Stoxx Europe 600 index jumped 0.4 percent to end at 274.85, up 1.6 percent for the week.

In Frankfurt, the German DAX 30 index added 0.4 percent, pushing the index higher by 1.8 percent for the week. Deutsche Telekom AG fell more than three percent after German daily Handelsblatt reported the telecom operators dividend payouts may drop by a third next year.

The CAC 40 index rose 0.5 percent in Paris after Societe Generale SA rallied 1.5 percent. The index is up 1.7 percent for the week. Following an upgrade from neutral to buy by Goldman Sachs, Veolia Environment SA rose 1.1 percent.

Up 1.1 percent for the week, the FTSE 100 index managed to add 0.1 percent after banks and resource firms turned higher.

Our Trend Tracking Indexes (TTIs) held fairly steady during the “Sandy” shortened week, and we’re still on the plus side of the trend lines as follows:

Domestic TTI: +1.34% (last week +1.25%)

International TTI: +3.24% (last week +2.79%)

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 Dom:

Q: Ulli: After building a Portfolio, what do you do with the Sales proceeds from those funds sold after exceeding the 7% Sell Stop?

A: Dom: First, the proceeds go into the money market portion of our account.

Then you look for either other opportunities (ETFs that are trending up), or you wait for a market turnaround to reinvest. If you review the model ETF portfolios, you’ll note that we had been stopped out of various holdings, but reinvested later on as the upward trend resumed.

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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, November 2, 2012

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/2012/11/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-11012012/

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Market Commentary

Friday, November 2, 2012

US STOCKS SLAMMED AFTER THURSDAY’S RUN-UP; WORRY PREVAILS AHEAD OF PRESIDENTIAL ELECTIONS; EUROPE RISES ON US JOBS DATA

US equity indexes sank Friday to cap a truncated trading week with steep losses as cheer over better-than-expected employment data was offset by nervousness ahead of next week’s presidential election.

Markets were buoyed by employment data earlier that showed the US economy created more jobs than expected in October, the last significant piece of economic data before the country goes to the polls next week. Nonfarm payrolls gained by 171,000 in October, more than the 125,000 projected by most economists. Hiring also picked up faster than estimated in the preceding two months than previously believed, the report showed.

The unemployment rate, calculated from a separate survey of about 60,000 households, ticked higher to 7.9 percent from 7.8 percent in September, indicating a rise in labor force participation, which was in line with expectations.

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 11/01/2012

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, November 1, 2012

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

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 broken above its long term trend line (red) by +1.97%. A break back below it will generate a Sell signal to move out of all domestic equity positions. Be sure to tune into my blog for the latest updates.

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US Equity ETFs Stage A Comeback And Rally The Most In Nearly Two Months On Data; Europe Follows Suit

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US stock ETFs started November on a strong note with the major benchmark indexes rallying more than one percent, the most in seven weeks, after employment and manufacturing topped estimates and consumer confidence surged to more than four-year high in October.

Economic data were mostly positive on Thursday.

Payroll processing firm ADP said 158,000 private-sector jobs were created in October, the most in eight months, the Institute for Supply Management’s US factory index rose to 51.7 in October from 51.5 a month earlier and the Conference Board’s consumer-confidence index increased to 72.2 in October – the highest since February 2008, from a downwardly revised 68.4 in September.

Separately, a Labor Department report showed weekly initial jobless claims fell by 9,000 to a seasonally adjusted 363,000 pace last week. How this all stacks up to the real unemployment data, we will find out on Friday morning.

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