[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Just a day after the Nasdaq hit its highest mark in 15 years the markets turned downward. The S&P 500, Dow and Nasdaq all retreated from record highs.

We saw some great numbers come in for auto sales in the month of February. Apparently, big snowfall and freezing temperatures had little impact on the industry’s sales. Almost all major auto manufacturers reported gains, especially Toyota Motor (TM).

Best Buy (BBY) was back in the news today after reporting a revenue increase of 1.3% for the fourth quarter of 2014. Big screen TVs and mobile phones sales were particularly strong and were noted as the primary drivers of the company’s year-over-year revenue growth. Shares gained 1.2% in afternoon trading.

In M&A news, Springleaf Holdings said it will buy Citigroup’s OneMain Financial for $4.25 billion in cash. LEAF’s stock gained about 30% on the news.

In international news, keep an eye on China’s indexes. The country’s ceremonial legislature starts its annual session on Thursday and is expected to announce a growth target for 2015.

All of our 10 ETFs in the Spotlight headed south and closed lower with SPLV showing the most resistance towards today’s slide (-0.21%).

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[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Markets were in a tizzy today because the Nasdaq closed above 5,000 for the first time since 2000. In addition, the dollar has been raging upwards in valuation over the past couple of months and closed today at an 11 year high on expectations that the Fed may raise interest rates later this year. However, the exact date remains a mystery, as it has been for the past year.

The international bulls continue to charge forward it seems, pushing on from a record breaking February. Today, stock prices were propelled higher due to news from China that there was a surprise cut in interest rates from the country’s central banks, which was unexpected. According to Reuters, the rate cut shaved a quarter point off benchmark lending and deposit rates, less than four months after the last reduction. The cut was sooner than many economists and analysts expected.

In the world of retail, Costco (COST) officially named Citigroup (C) and Visa (V) as the new partners of its credit card program after the deal with American Express (AMEX) expires next year. The agreement will take effect as of April 1, 2016. Citi will be the exclusive issuer of credit cards and Visa will provide all inclusive network support. Financial terms of the agreements were not disclosed. However, Costco said it would provide additional information to its members in the coming months.

9 of our 10 ETFs in the Spotlight joined the surge late in the day and closed higher with Consumer Discretionaries (XLY) leading the way. 4 of them made new highs for the year.

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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 410 ETFs, of which currently 291 (last week 287) 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 97 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. 51 ETFs (last week 50) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 459 (last week 459) above the line and 361 below it out of the 820 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.

If you missed the original post about the Cutline approach, you can read it here.

Despite weak credit conditions, lower oil and a slumping euro, Goldman Sachs is optimistic about the region’s growth prospect this year, said Kevin Daly, Senior European economist at Goldman Sachs.

The investment bank revised euro area’s GDP growth-forecast higher – between 1.2% and 1.5% for this year and between 1.6% and 1.7% for next year. For the first-time, GS is above consensus on euro-area growth forecasts since the crisis broke out in 2008.

There are four reasons why GS is positive about the region; first, oil prices have fallen 35 percent in euro terms, which is good enough to boost growth around 1% – 1.5% over a period of two years. Second, the euro has fallen by more than 10 percent over the past 12 months and that’s enough to add an additional 1 percent to the level of euro-area GDP.

Thirdly, credit conditions have been improving, particularly in the peripheral countries and lastly, the pace of fiscal consolidation has started to slow. These four developments make Europe look more attractive than before he noted.

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FFCM LLC, the Boston, MA-based investment advisor to QuantShares, recently rolled out its fifth exchange-traded fund that takes a unique long-short strategy in dividend investing. The newly launched QuantShares Hedged Dividend Income Fund (DIVA) takes refined approach that is likely to attract investors looking for dividend income.

The passively-managed DIVA tracks the INDXX Hedged Dividend Income Index, which was created in February 2013. The index aims to maximize capital appreciation and offer high current-yield while maintaining risk-profile similar to a corporate bond index.

To achieve its dividend income objective, the new fund selects 100 stocks from the 1000 largest US stocks that have a history of paying consistent or growing dividends and that generate high dividend yields. All the 100 stocks are weighted equally for optimal diversification.

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ETF/No Load Fund Tracker StatSheet

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

http://www.theetfbully.com/2015/02/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-02262015/

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Market Commentary

Friday, February 27, 2015

STOCKS FALL FRIDAY, BUT POST IMPRESSIVE MONTHLY RESULT

[Chart courtesy of MarketWatch.com]

1. Moving the Markets

Stocks fell Friday, but the major indexes were little changed on the week. Consumer staples lead the gainers, while energy shares declined along with oil prices. Friday’s trading officially rounded out the month of February, which was perhaps the best month for major indexes since October of 2011. For the month, the S&P 500 rose 5.5%, the Dow gained 5.6% and the Nasdaq surged 7.1%, despite horrific economic data, which missed 90% of expectations.

Fed Chair Janet Yellen provided two days of testimony to Congress this week. The primary takeaway was that inflation and wage growth remain low enough that a rate hike is unlikely in the next couple of months, but the Fed continues to monitor for improving conditions that would warrant a tightening of policy.

Economic data for this week was mixed overall, but allegedly continues to point toward growth of 2.5% to 3% for 2015 in the U.S., which is a stronger pace than most developed economies around the globe. Gross domestic product (GDP) growth was revised downward to 2.2% from the initial estimate of 2.6%. The downward revision was slightly smaller than expected; however, consumer spending was the strongest driver of economic growth in the quarter, growing 4.2%, which is the fastest pace since the first quarter of 2006.

9 of our 10 ETFs in the Spotlight slipped today with one them moving into the red YTD, as table 2 below shows.

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