Economic Report, ECB Spur Bank Rally; Europe Wobbles

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US stocks jumped Thursday with the Dow registering its third gain session in four after the latest jobless report beat estimates, and the US Fed said it allegedly can manage risks arising out of the latest round of balance sheet expansion.

Sentiment got a boost after a Labor Department report revealed initial unemployment benefits claims rose by 4,000 to 367,000 last, still lower than the psychological 400,000 mark and falling short of the projected 370,000. Factory orders also lent support with the August gauge slipping by 5.2 percent versus a projected 5.9 percent decline.

Earlier, the ECB President Mario Draghi stood by his previous pledge to save the euro and said it’s up to the region’s politicians now to seek help as needed.

Risk sentiment was buoyed after the latest FOMC minutes showed most of Chairman Bernanke’s colleagues thought risks could be managed since the central bank could make adjustments to its purchases in response to economic developments or changes in its assessment of the program’s efficacy or cost.

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US Indexes Edge Higher On Data; Europe Ends Lower On Spain Jitters

Ulli Market Commentary Contact

US indexes finished marginally higher Wednesday as improved services sector and payroll data lifted investor sentiments but the gains were pared after China’s official non-manufacturing PMI reading for August dropped to the lowest level since March 2011.

The Institute for Supply Management’s non-manufacturing index that covers nearly 90 percent of the economy rose to 55.1 in September from 53.7 in August, its highest reading since March.

The ADP Employer Services report, the frontrunner to the all-important non-farm payrolls data due later this week, showed US private sector created 162,000 jobs in September, beating forecasts made by most economists but lower than the prior month’s revised estimate of 189,000. However, in the past these ADP numbers have not been a reliable heads up indicator of Friday’s payroll report.

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7 ETF Model Portfolios You Can Use – Updated through 10/2/2012

Ulli Model ETF Portfolios Contact

Despite one sharp down day last week, the S&P 500 continued to ride the trading range and added some 4 points since my last ETF Model Portfolio report.

Upward momentum in the indexes has definitely slowed down as the Fed’s ongoing and open ended QE program no longer provides the market with what it’s been living on for the past few years, and that was “anticipation” of more QE and not its actual implementation.

We are now facing the month of October with all of its historical uncertainties, so I feel the need to sing the same song again and that is to remind you to be aware of your sell stops and execute them should the need arise.

While it may never come to that point, this is not the moment in time to take any chances as negative data points can surface suddenly and unexpectedly and pull the markets back to a level that is more aligned with underlying fundamentals.

In the meantime, take a look at the latest ETF model update:

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Dow Industrials Closes Lower On Spain Worries; Banks Slip In Europe

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

The major indexes finished mixed today with the Dow Jones Industrial Average sinking for the first time in three days after Spanish Prime Minister Mariano Rajoy contradicted a previous Reuters report that said the country could seek help from the European Union as early as this weekend.

The Dow Jones Industrial Average (DJIA) closed 33 points lower, recovering from a steeper 90-point drop. 19 of the 30-component blue-chip index ended lower as breadth turned negative on a choppy trading day.

The S&P 500 Index (SPX) managed a modest 2 point gain on a last hour rebound to finish on the plus side with utilities and healthcare outperforming and materials faring the worst among its 10 business groups.

Treasuries hit a near one-month high as investors sought refuge in safe haven after Spanish Prime Minister Mariano Rajoy dismissed media reports the country may seek a full-fledged bailout shortly.

Reuters had previously reported quoting unnamed European officials that the Iberian nation is close to formally seek help though Berlin has signaled to Madrid to hold off as it believed the country was on course to repair the shortcomings and may not need a bailout. That would have to go down as the joke of the day.

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Equities Fizzle After Bernanke Speech Disappoints; Europe Ends Higher On ISM Data

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

US equity ETFs ended the first day of the quarter mostly higher after data released by the Institute for Supply Management showed US manufacturing activity rose to 51.5 in September, marking its first expansion in four months.

However, risk appetite diminished after Fed Chairman Ben Bernanke said headwinds to the economy due problems in Europe and ECB actions will not solve current problems, but will only provide time, deflating investor enthusiasm.

After vaulting as much as 161 points following the September ISM reading, the Dow Jones Industrial Average (DJIA) settled a more modest 78 points higher while the S&P 500 Index (SPX) added 3 points with healthcare and consumer staples outperforming and technology and utilities sinking the most among its 10 business groups.

The allure for safe havens spiked, pushing Treasury securities to near three-week highs after a September government survey showed manufacturing contracted for the second month in China. Risk aversion soured further after a Bank of Japan survey showed business sentiment has eased in the third quarter.

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ETFs/Mutual Funds On The Cutline – Updated Through 9/28/2012

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 348 (last week 163) 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. 76 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 816 (last week 830) above the line and 46 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.