Retailers Drag Markets Down Amid Economic Uncertainty

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[Chart courtesy of MarketWatch.com]

  1. Moving the market

Equities dropped this morning as the S&P 500 retreated from yesterday’s new all-time high, following a disappointing forecast from Walmart.

The stock fell over 6.5% after the company announced lackluster fiscal year sales growth of 3-4% and a 2026 earnings outlook that fell below expectations. This weak guidance raised concerns about the health of the consumer.

The news dragged down fellow retailers Target, Palantir, and Costco, reducing risk appetite on Wall Street and leading to a down session. Adding to the economic uncertainty, the Leading Economic Index unexpectedly contracted in January.

The most shorted stocks gave back a portion of last week’s gains, as the major indexes managed to bounce off their worst levels of the day but still closed in the red, led by the Dow.

Bond yields slipped, the dollar weakened, while Bitcoin built on yesterday’s rebound and crossed the $98k level, with gold following suit and adding 0.56%.

The precious metal has continued last year’s strong performance, outperforming the S&P 500 year-to-date by a ratio of 2.9 to 1.

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Equities Rebound On Fed Taper Hints; Dollar And Bitcoin Rally

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[Chart courtesy of MarketWatch.com]

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After yesterday’s record session for the S&P 500, the major indexes pulled back moderately due to concerns about persistent inflation and proposed trade tariffs by Trump. He suggested imposing duties of up to 25% on imported autos, chips, and pharmaceuticals.

Among the S&P 500 sectors, Materials were the worst performers, losing around 1%, while Energy defied the trend with a 1.4% gain as today’s session began.

Despite the negative sentiment surrounding inflation and bond yields, the market’s resilience since Trump took office a month ago has been impressive.

Equities managed to recover and close in positive territory once again, spurred by the latest Fed Minutes hinting at a possible taper or pause in the Fed’s tightening program.

Falling bond yields, weak housing starts, and lower trending macro data also contributed to the market’s recovery. The dollar rallied for the second consecutive day, gold remained relatively unchanged, and oil prices fluctuated but ended with a small gain.

Bitcoin rebounded from yesterday’s decline, approaching the $97k level. Will it finally be able to conquer the $100k resistance again?

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Strong Start To Weak Season: Can Market Momentum Continue?

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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The markets showed little activity early on, with the S&P 500 trading near its highs and eventually closing at a new all-time high.

Some tech stocks, including Intel, Nvidia, and Microsoft, posted gains, with Intel leading the pack and achieving its largest two-week increase on record. Meanwhile, Meta’s 20-day win streak came to an end, causing the mega-cap sector to retreat.

After a winning week, with the Nasdaq advancing 2.6% and the S&P 500 up 1.5%, a pause may be in order. The bullish trend was supported by Trump’s announcement on Thursday about reciprocal tariffs, which were less stringent than feared.

The markets have been in a consolidation period since early December, with a potential breakout likely influenced by the latest news from Washington, which remains unpredictable.

The most shorted stocks declined, while gold surged towards the $3,000 level. In contrast, Bitcoin hit a near three-week low, and oil prices continued their rebound from Friday.

Bond yields increased, reversing the previous day’s decline and lowering expectations for a 2025 rate cut.

Despite being in the seasonally weakest period of the year, today was a strong start. Can this momentum be maintained, or will historical precedent prevail?

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ETFs On The Cutline – Updated Through 02/14/2025

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Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (182 vs. 215 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you. If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For February 14, 2025

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ETF Tracker StatSheet          

You can view the latest version here.

STOCKS, BITCOIN, AND GOLD RISE DESPITE INFLATION CONCERNS

[Chart courtesy of MarketWatch.com]

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The major indexes paused early on as traders digested this week’s gains, most of which were generated yesterday.

President Trump’s memorandum outlining a plan for reciprocal tariffs on goods from countries with duties on U.S. products boosted sentiment for equities. The delayed implementation of these tariffs provided additional optimism. The tech sector benefited the most, with the Nasdaq leading the charge for the week.

Traders were also relieved that the CPI and PPI reports, although hotter than expected, suggest a softer upcoming reading for the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge.

However, concerns about stagflation—rising inflation coupled with lower growth—resurfaced as core retail sales and manufacturing activity for January both declined, contrary to expectations.

Despite these mixed signals, the week ended positively with stocks, Bitcoin, and gold moving higher, although gold faced some pressure today. Bond yields and the dollar were lower as rate-cut expectations rebounded.

The mega-cap tech sector broke out of its trading range, partly due to Meta’s impressive 20th consecutive up day, the longest winning streak for any Nasdaq stock ever, as noted by ZH. The most shorted stocks were squeezed all week, adding to the bullish market sentiment.

With inflation rearing its ugly head again, will we see a repeat of the 1970s, or will this time be different?

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 02/13/2025

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ETF Data updated through Thursday, February 13, 2025

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— since 11/21/2023

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +4.33% and is in “Buy” mode as posted.

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