The Dow staged a late-session comeback to break a two-session losing streak even as US stocks ended mixed Thursday.
A raft of weak economic numbers, including a higher-than-expected jobless claim, soured investor sentiments driving both the NASDAQ and the S&P 500 lower for the second day in a row.
Strong demand for Treasuries pushed yields down as investors rushed to seek refuge in safe-haven assets as European debt worries continue to spook markets.
Equity ETFs extended losses Wednesday after US durable goods orders came in weaker than expected, fueling global growth worries.
Commodities took a big hit with copper and oil roughly falling by 2 percent while gold lost more than a percent as investors dumped energy and materials related stocks.
Treasuries tumbled for the second day as demand for US debt hit the lowest mark in seven months with investors questioning if another round of quantitative easing may be on the table by the Federal Reserve.
Thanks to Bernanke’s equity boost last Monday, the major market ETFs rallied strongly interpreting his words as continued loose monetary policy, which is supposed to bode well for equities.
Since last Wednesday’s update, the S&P 500 added another 0.5% increasing the YTD gains. While that may give many investors the warm fuzzies, I believe that continued manipulation of interest rates, and equities as well, will not end well, as economic reality has been removed from the equation, and we have entered unchartered territory.
Right now, things are going well, but sooner or later we will have to face some unintended consequences. Again, let me be the voice of reason by asking you to not forget my recommended exit strategy. The day will come, when it will be sorely needed.
Here’s the latest ETF Model Portfolio update:
US stocks took a break to close lower Tuesday, as the day’s economic data gave investor’s little reason to cheer about after Monday’s rally.
Treasuries rallied today showing not everybody believed that the bond bear market started Monday when economic reports showed decline in home consumer confidence and prices. Demand for US debt was well supported at a government sale of $35 billion in two-year notes being recorded at 3.69, versus an average of 3.53 for the past 10 sales.
The Dow Jones Industrial Average (DJIA) dipped 0.3 percent to 13,197.73 on weak economic data after rallying more than 1 percent Monday. Home prices in 20 major US cities declined 3.8 percent year-on-year in Jan to hit the lowest level since 2002, according to S&P/Case-Schiller index. There was little to cheer on consumer confidence as the Conference Board’s Consumer Confidence Index also dipped to 70.2 in March from 71.6 in February.
US equity ETFs surged Monday, erasing a week’s losses after Federal Reserve Chairman Ben Bernanke expressed concern over the job market momentum sustainability and reaffirmed further liquidity injection if necessary.
30-year bond yields rose the most in a week after Bernanke hinted at continuing the record low interest rates, boosting bets that inflation will move north supporting the case for gold. The number of customers signing up for previously owned homes remained at an almost two-year high, data released by the National Association of Realtors showed.
The Dow Jones Industrial Average (DJIA) jumped 160.90 points to 13,241.63, its biggest rise since Jan 3 when the index climbed 180 points. Only one of the 30 components fell on the Dow while the S&P 500 Index (SPX) added 19.40 points to close 1416.51, with consumer discretionary, technology and healthcare advancing the most.
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 349 (last week 349) 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. 74 ETFs (last week 76) 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 805 (last week 817) above the line and 56 below it out of the 861 that I follow.
Take a look: