The Next Crisis: Will Spain Sink The European Union?

Ulli Market Review Contact

As the chatter of Greece exiting the eurozone gets louder, questions are being raised about Spain and Italy requiring bailout money from the European Central Bank to avoid a sovereign default.

The Spanish and Italian banks have used the ECB’s cheap three-year loan to buy government debt, which ostensibly is a carry trade – borrow cheap and lend at a higher rate.

Spanish banks have borrowed €220 billion under the ECB’s LTRO program and between December and April purchased €85 billion in sovereign papers. Some of the cash has been used to refinance private debts falling due, leaving the region’s banks with €82 billion in free cash. That is twice the €41 billion Madrid would still require to raise this year. If domestic lenders agree to swap maturing government debts, Spain may actually require €20 billion in new funding.

Read More

Taking Stock: Market Vectors Emerging Markets High Yield Bond ETF (HYEM)

Ulli Bond ETFs Contact

Van Eck Global, the managers of the Market Vector range of exchange traded funds, have launched a new emerging markets high yield bonds this week, its third high-yield bond ETF in about a month.

The money manager launched the new fund as advisors and investors have started to diversify their fixed-income allocations to create layered risk levels in their portfolios, spiking the demand for alternative fixed-income funds.

The Market Vectors Emerging Markets High Yield Bond ETF (HYEM) will track the BofA Merrill Lynch High Yield U.S. Emerging Markets Liquid Corporate-Plus Index, which comprises of 272 US-dollar denominated non-investment grade bonds issued by 162 non-sovereign emerging market issuers including corporate from Argentina, Azerbaijan, Barbados, Brazil, Chile, China, Colombia, Egypt, El Salvador, Hong Kong, India, Indonesia, Israel, Jamaica, Kazakhstan, Mexico, Nigeria, Oman, Peru, the Philippines, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Turkey, Ukraine, United Arab Emirates and Venezuela.

Read More

05-11-2012

Ulli Newsletter Archives Contact

ETF/No Load Fund Tracker Newsletter For Friday, May 11, 2012

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2012/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05102012/

————————————————————

Market Commentary

Friday, May 11, 2012

JP MORGAN LOSS WEIGHS ON STOCKS; EEME SHINES, IYG FADES

US stocks finished the week lower for the second consecutive week on Friday as banking giant JPMorgan Chase announced an unexpected $2-billion trading loss, sending investors running for cover. I still stick to my comment from yesterday that there is never just one cockroach, and we’ll have to wait and see if others appear as time goes on.

A Labor Department report showing producer prices dropped 0.2 percent in April, with core prices excluding energy and food rising 0.2 percent did little to ease investor fear. In a longest stretch of gains since 1998, Treasuries rose for the eighth week in a row as the Greece political circus continued, spiking demand for US safe-haven assets as risk appetite diminished. A four-year high reading of a key consumer confidence index in May did precious little to calm nerves.

The Dow Jones Industrial Average (DJIA) slipped 34 points to finish the week at 12,820.60, JP Morgan Chase (JPM), the index’s heaviest component posted a sharp 9.3 percent decline.

The S&P 500 Index (SPX) shed 4.60 points to settle at 1353.39, off 1.2 percent over last week, with. Financials are faring the worst among the 10 industry groups.

The NASDAQ Composite Index (COMP) climbed up fractionally to close at 2933.82, off 0.8 percent over last Friday.

Wall Street’s biggest bank (by balance sheet) JP Morgan Chase’s surprise loss drove the benchmark 10-year bonds higher for the eighth straight week, with yields dropping three basis points to 1.84 percent. Yields on 30-year bonds dropped 0.03 percentage points to close the week at 3.01 percent.

ETFs in the news:

Among the day’s top gainers, the MSCI Emerging Markets EMEA Index Fund (EEME) came out tops. This fund tracks the MSCI Emerging Markets EMEA Index, which in turn is designed to measure the performance of equity securities in emerging countries in Europe, Africa and the Middle East; it added 2.11 percent.

The S&P 500 VIX Short-Term Futures ETN (VXX) remained among the day’s top winners, as indexes swung wildly between gains and losses before settling in the green. Despite today’s gain, the fund is down 48 percent since the beginning of 2012. This ETF is not for the faint hearted and discretion is required.

As the financial sector slipped on JP Morgan’s loss news, the iShares Dow Jones US Financial Services Index Fund (IYG) dropped 1.48 percent. JP Morgan blamed the surprise loss to sour trades, leaving investors worried over similar losses from other banks. This ETF will be an interesting watch as the banking-sector story slowly unfolds.

Our Trend Tracking Indexes (TTIs) slipped as well, with the domestic one remaining above the line. The International TTI has been hugging its trend line on both sides but eased below it by a small margin.

Here are this week’s closing numbers:

Domestic TTI: +3.26% (last week +3.99%)

International TTI: -0.18% (last week +1.53%)

As I posted yesterday, I will wait with issuing a ‘Sell’ signal until the International TTI clearly drops into bearish territory and remains there for a few trading days.

Have a great week.

Ulli…

Disclosure: No holdings

————————————————————-

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 Sam:

Q: Ulli: Recently, you sold VEU after it had dropped 7% from its high, but in the model portfolios you still hold DBC, when it’s lost more than 9%. Care to share your reasoning?

A: Sam: Sure; remember, different asset classes have different sell stop points. For broadly diversified domestic and international funds/ETFs, I use 7%.

For more volatile sector/country funds/ETFs, I use 10% and for bond ETFs, I use 5%. DBC falls in the sector fund classification.

———————————————————-

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/

———————————————————

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, May 11, 2012

Ulli ETF Tracker Contact

ETF/No Load Fund Tracker StatSheet

————————————————————-

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

https://theetfbully.com/2012/05/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-05102012/

————————————————————

Market Commentary

Friday, May 11, 2012

JP MORGAN LOSS WEIGHS ON STOCKS; EEME SHINES, IYG FADES

US stocks finished the week lower for the second consecutive week on Friday as banking giant JPMorgan Chase announced an unexpected $2-billion trading loss, sending investors running for cover. I still stick to my comment from yesterday that there is never just one cockroach, and we’ll have to wait and see if others appear as time goes on.

A Labor Department report showing producer prices dropped 0.2 percent in April, with core prices excluding energy and food rising 0.2 percent did little to ease investor fear. In a longest stretch of gains since 1998, Treasuries rose for the eighth week in a row as the Greece political circus continued, spiking demand for US safe-haven assets as risk appetite diminished. A four-year high reading of a key consumer confidence index in May did precious little to calm nerves.

The Dow Jones Industrial Average (DJIA) slipped 34 points to finish the week at 12,820.60, JP Morgan Chase (JPM), the index’s heaviest component posted a sharp 9.3 percent decline.

Read More

Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 05/10/2012

Ulli ETF Tracker Contact

ETF/Mutual Fund Data updated through Thursday, May 10, 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 +3.44%. Be sure to tune into my blog for the latest updates.

Read More

US Broad Markets End Losing Streak; EWP Pops, KWT Drops

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

US broad markets ended higher with the NASDAQ dropping after blue-chips reversed their longest losing streak in nine months following a dip in jobless claims.

Investors, however, remained cautious as Europe wavered over Greece’s possible exit from the monetary union. Treasuries cut losses as investor-demand for safe-haven US debts remained strong, though yields rose for the first time this week today.

The Dow Jones Industrial Average (DJIA) struggled to gain 19.98 points, breaking the six-day losing streak. All but 11 of the blue-chip’s 30 components ended higher with computer networking gear-maker Cisco Systems Inc (CSCO) hitting the ground hardest, losing 10 percent for the day.

Read More