US Equity ETFs Slide As Greece’s Exit Continues To Loom; VXX Surges, GLDX Plummets

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

US equity ETFs retreated Tuesday, while the Dow inched towards its four-month low as developments from eurozone kept investors edgy despite steady economic numbers from the home-front.

US retail sales grew by 0.1 percent in April, while CPI reading changed little for the month. The New York Empire State Index showed manufacturing bounced bank in May, zooming to 17.1 in May from 6.6 in April.

US Treasuries yields traded close to seven-month lows, with the 10-year benchmark yields rising slightly after European statistics office reported little GDP growth in the region in Q1, beating a 0.2 percent contraction forecast.

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US Stocks Get Clobbered As Greece Heads Towards Euro Exit; International TTI Signals ‘Sell’

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

US equities marched south Monday with all three indexes losing about one percent as markets remained concerned over the future of the currency-union in Europe and the safety of American banks following JP Morgan’s unexpected 2-billion trading loss.

Greece’s political parties struggled to form a coalition over the weekend, fuelling fears of a re-election that is expected to swing towards the extreme lefts who have vowed to reverse the country’s austerity measures, risking its continuation in the eurozone. Long-term, that would be the best solution for Greece.

The Dow Jones Industrial Average (DJIA) tumbled 125.25 points while the S&P 500 Index (SPX) lost 19.64 points to settle at 1338.35 with the financial sector faring the worst among the 10 business groups.

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ETFs/Mutual Funds On The Cutline – Updated Through 5/11/2012

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 274 (last week 309) 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. 46 ETFs (last week 58) 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 748 (last week 789) above the line and 113 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.

Last Week In Review: ETF News And Blog Posts To 5/13/2012

Ulli Market Review Contact

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 5/13/2012.

Much uncertainty about the worsening European debt crisis pulled the benchmark S&P 500 index lower by some 1.2% for the week. Overall, upward momentum has slowed, especially in the international area as shown by my International Trend Tracking Index (TTI), which is now hovering on the plus and minus side of its long term trend line by a very small percentage.

Towards the end of the week, news of JPM’s trading losses, so far estimated to be in the $2 billion range, caused nervousness on Wall Street. The big question in my mind is whether that was an isolated incident or if there is more to come. I my guess is the latter but it may take some time for the other cockroaches to emerge.

This week, we covered the following:

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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.

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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.

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