The markets, as measured by the benchmark S&P 500, rallied since last week’s ETF Model portfolio report with the index gaining some 2.5%.
There were really no spectacular economic news to justify the advance; in fact, more negative than positive data points made the headlines, but the bulls seemed to have their eyes feasted on the potential safety net provided via more easing by the Fed. Go figure…
All model portfolios inched higher, as the latest update shows:
US stocks edged higher Tuesday after the latest ISM data indicated that US manufacturing activities expanded in April, offsetting concerns of an economic slowdown.
The Dow hit its highest level since 2007 on hopes of better jobless data due this week. Treasury yields climbed from near three-month lows after slipping yesterday as two regional Federal Reserve presidents announced that the central bank may hike interest rates earlier than estimated.
The Dow Jones Industrial Average (DJIA) climbed 0.5 percent for the day, its highest ending since Dec 2007. The S&P 500 Index (SPX) rose 0.6 percent with energy leading the gainer’s pack among the 10 industry groups.
US broad markets closed mostly lower Monday, meandering south as weaker-than-estimated economic data weighed on investors’ mind.
This is the year’s first monthly decline as weak consumer spending growth and the soft reading of the Chicago area business-activity index dragged markets down, though the Dow ended the month slightly higher, its longest streak since Jan 2007.
Demand for US safe-haven debts spiked over concerns of a deteriorating European sovereign crisis and slowing US economic expansion. With the all important jobs data due out on Friday, it will be interesting to see if there is more upward momentum in store or if the bulls now assume the fetal position.
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 354 (last week 334) 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. 73 ETFs (last week 66) have managed to move into in bullish territory after the recent run up.
The third report covers Mutual Funds on the Cutline. There are currently 817 (last week 804) above the line and 44 below it out of the 861 that I follow.
Take a look:
2. ETF High Volume Cutline Report
In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.
In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 4/29/2012.
Strong earnings, despite lowered expectations, were the main story last week, which powered the major indexes higher despite some very questionable economic reports. A low GDP number failed to damp enthusiasm, and the S&P 500 gained four days in a row.
With one more trading day left, we are now within striking distance of where we stared the month of April. Despite downgrades in Spain, Europe was fairly quiet this week, but that may change as we are nearing the final round of the French elections on May 6 along with elections in Greece.
Depending on expectations and outcome, that could sure challenge the continuation of any remaining upward momentum in the US markets.
This week, we covered the following:
Now that the Q1 GDP number has come lower than expected, are we going to witness another round of quantitative easing after the present “Operation Twist” ends in June?
Mark Luschini, Chief Investment Strategist at Janney Montgomery Scott doesn’t think so, especially in an election year.
The yield on 10-year Treasuries is still low below 2 percent. As investors continue to seek refuge in safe-haven assets, other asset classes like equities remain on the sidelines. Mark thinks a shock treatment is required to force people out of bond markets or bond mutual funds. However, people who believed in bonds were vindicated by the Fed’s QEs that resulted in a directional tailwind in the third-year of easing.