US Stock Indexes Close Flat, Builder ETFs Rise As Pending Home Sales Near 2-Year High

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

US stocks closed flat despite the domestic economy showing signs of improvement and Europe appearing less toxic. Early gains for the day, after stronger-than-expected housing data came in, were offset by a pullback in the energy sector.

The Dow Jones Industrial Average (DJIA) shed 0.01 percent, to end at 12,982 while the S&P 500 managed to add 1.9 points and closed 1,368. The NASAQ Composite added 2.4 points to Friday’s close to settle at 2,966.

The energy sector was down 0.4 percent as oil prices retraced from the $110 a barrel mark to pare previous gains.

Stocks were falling in early trade as reports of G20 ministers rebuffing Germany’s call for higher resources for the Eurozone appeared overnight. The Group of 20 countries said Europe must strengthen their financial firewall before other nations commit more money to the International Monetary Fund.

The G20 is planning to create bailout funds worth $2 trillion with $1 trillion from Europe’s temporary (EFSF) and permanent funds (ESM) and about $500 billion for the IMF.

Read More

ETFs/Mutual Funds On The Cutline – Updated Through 2/24/2012

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 360 (last week 353) 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. 79 ETFs (last week 74) 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 815 (last week 808) 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

Last Week In Review: ETF News And Blog Posts To 2/26/2012

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 2/26/2012.

Meandering with an upside bias best describes the trend of the past week. The major indexes have reached a crucial point which, if broken to the upside, could mean further advances and confirmation of the current bull market. The milestones are 1,370 for the S&P 500 and 13,000 for the Dow.

If momentum weakens, and these hurdles are not overcome, the downside could come into play again, which should not be surprising given the fact that we have not seen a decent market pullback this year.

This week, we covered the following:

Read More

Equity Markets Are Witnessing A Rally Now. Is It Driven By Fundamentals?

Ulli Market Review Contact

Markets in the US have touched June highs since 2008, and the Dow is flirting with 13,000. Is the equity market witnessing a bull run, particularly since the start of this year? Or is the market overpriced and a pullback is imminent?

The S&P is up eight percent year-to-date and nearly 25 percent since October 2011 lows. Some of the emerging markets have recovered spectacularly and are up more than 20 percent year-to-date.

If Saira Malik, Head of Global Equity Research at TIAA-CREF, a large teacher’s retirement fund, is to be believed, the Dow is now fairly valued. The recent rally has been caused by a combination of both local and global events such as stronger manufacturing in the US, the ECB’s LTRO initiative, better investor confidence in Germany and better business surveys in China.

However, investors should cut their risk exposures to moderate levels since energy prices have shot up recently. This will affect consumer spending and profitability of companies and it has already reflected in the forward looking earnings estimates of the S&P, which has dipped to 9 percent from 11 percent.

The utilities, which tend to do well during slowdowns, have done well in the last four months. Investors can target them for better dividend yields unless markets turn extremely negative. Currently trading at 14X of forward-earnings, the S&P is fairly valued now since historically it has traded in the 12X to 18X range in the last five years.

The liquidity enhancing measures taken by the Fed in the US, by the ECB in Europe, by the BoE in England, and by the BoJ in Japan, will ensure that the markets remain well funded in near future. You can watch the full interview here.

Whether these measures will have the desired long-term positive effect remains to be seen. I view them merely as desperate band aid approaches, since the real underlying issue of too much debt anywhere you look, has not been addressed.

A Week Of Small Gains For the Major Market ETFs — Lofty Levels May Cause More Volatility

Ulli Market Commentary Contact

Wall Street witnessed another week of volatile trading though US stock indexes made weekly gains on Friday and the S&P 500 Index closed at its highest level since June 2008 after consumer confidence and home sales reports topped expectations.

The earnings season is drawing to a close and markets next week will probably be more macro-economic news driven. So far this week, domestic economic indicators have been by-and-large positive, helping offset concerns on Iran’s nuclear program and rising oil prices with crude futures for April delivery closing at $109.77 a barrel on Friday, the highest since May last.

The market volatility is likely to continue next week with possible positive economic developments and concern over the impact on consumer spending from rising energy prices driving the index movements.

The Dow Jones Industrial Average (DJIA) closed at 12,982.95, up 0.3 percent on the week, while the S&P 500 climbed to 1,365.74, a gain of 0.3 percent from last week’s finish. The NASDAQ Composite ended the week at 2963.75, a weekly gain of 0.4 percent.

Data released by Thomson Reuters show 63 percent of the companies among the 461 S&P 500 firms that have declared Q4 results so far, have managed to beat the (already lowered) street expectations on earnings.

Read More