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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Major Market Indexes Log First Monthly Drop Since May; Europe Meanders Amid Choppy Trade

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US stock indexes logged their first monthly loss since May with the S&P 500 retreating 2.01%, capping a weak month on a mixed note Wednesday after markets reopened following a two-day closure due to super-storm Sandy.

Economic data was relatively light with the Chicago Purchasing Manager’s Index data for October printing at 49.9 from 49.7 in the prior month, still in the ‘contractionary’ region and signaling weakness in the manufacturing sector for the second straight month. Readings above 50 indicate expansion.

Stocks in the construction and housing sectors are likely to rise due to the massive rebuilding that will follow after Hurricane Sandy. However, odds are insurance companies will suffer as markets try to figure out the earnings hit the sector will take in the fourth quarter.

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7 ETF Model Portfolios You Can Use – Updated through 10/26/2012

Ulli Model ETF Portfolios Contact

Due to this week’s closure of the markets on Monday and Tuesday, as a result of hurricane Sandy, all ETF model portfolios have been updated through last Friday, October 26.

Since this only represents 3 days of data, during which the S&P 500 ended up literally unchanged, the models moved only slightly.

Hopefully, we’ll be back to a normal schedule come next Wednesday, which I am sure will offer some fireworks being the day after the election.

Here’s the latest update to our ETF Model Portfolios:

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US Markets To Reopen Wednesday; BP, Deutsche Bank Lift Europe

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

Traders are bracing for a volume surge Wednesday when US stock markets reopen after being shuttered for two days to deal with the devastating effects of Hurricane Sandy that triggered an unexpected shutdown on Wall Street.

An average of 3.5 billion shares have been changing hands everyday throughout much of the month, but traders say that could double Wednesday, which also happens to be the last trading day of the month, a time when traders and fund managers often square up their positions.

Meanwhile the US dollar weakened Tuesday over expectations that the damage wrought by Super storm Sandy will prompt the Federal Reserve to maintain its expansionary policies, robbing the greenback of its safe-haven status. The Bank of Japan’s announcement that it would expand its own asset purchase program proved insufficient to offset investors’ apprehension as Wall Street tries to recover from one of the biggest natural disasters in recent memory.

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Sandy Shuts Down Markets For Two Days; Europe Drifts Lower On Earnings, Hurricane Fear

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US stock markets will be closed for the second straight trading day on Tuesday as Wall Street assesses the impact of Hurricane Sandy. Exchange officials chose to suspend operations for the first time in 27 years Monday on safety concerns as Sandy lumbered towards the East Coast, bringing potentially devastating winds and surging waters.

The major exchanges, including NASDAQ, OMX and NYSE Euronext, said they hoped to restart normal operations Wednesday but will provide additional updates tomorrow.

Healthcare firm Pfizer pushed back the release of its earning report to Thursday from Tuesday. The US consumer spending rose a seasonally adjusted 0.8 percent in September, a Commerce Department report showed.

Treasury bonds rose marginally Monday, pushing yields down on a light trading day before trading halted at noon Eastern. The yield on the benchmark 10-year Treasury notes fell three basis points to 1.71 percent while 30-year Treasury bond yields slipped two basis points to 2.88 percent.

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ETFs/Mutual Funds On The Cutline – Updated Through 10/26/2012

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 305 (last week 339) 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. 69 ETFs (last week 80) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 635 (last week 756) above the line and 227 below it out of the 861 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.