[Chart courtesy of MarketWatch.com]

1. Moving The Markets

Wall Street fell Monday morning, a day after the current bull market’s fifth anniversary, weighed down by unexpectedly weak trade data from China, which resulted in a halt to the market’s record performance. Data out over the weekend showed that Chinese exports in February dropped 18.1% from a year ago, versus expectations of a 5% increase. Some economists say that the data is distorted by the long Lunar New Year that took place at the end of January.

In equities, Green Mountain Coffee Roasters Inc. (GMCR) announced its decision to change its name to Keurig Green Mountain, Inc to reflect its current business and goal in the future. It will remain trading its stock under the ticker symbol “GMCR” at the Nasdaq stock exchange. Last month, GMCR announced the completion of its transaction with The Coca-Cola Company (KO). The beverage giant agreed to acquire a minority stake in the specialty coffee company for $1.25 billion. The stock closed the day down about 1.9%.

We received a strong indication from the Fed today that they will continue to wind down their bond buying program. Charles Evans, president of the Chicago Fed, stated that the Federal Reserve will continue to trim its monthly asset purchases at a rate of $10 billion. With the bond buying winding down, the Fed’s more immediate challenge is re-writing a pledge to keep rates near zero until well after the unemployment rate falls below 6.5 percent. Because joblessness has fallen quickly to 6.7 percent, policymakers are debating how to adjust that pledge without giving the impression they will tighten policy any time soon.

Our 10 ETFs in the Spotlight pulled back slightly with none of them making new highs today but 8 of them are currently showing gains YTD.

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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 398 ETFs, of which currently 364 (last week 371) 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 74) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 769 (last week 752) above the line and 80 below it out of the 859 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.

10-year US Treasury yields have remained range-bound since June last year and the trading range has been very clear, varying between 2.5 and 3 percent, suggesting borrowing is back, said Anthony Crescenzi, a portfolio manager at PIMCO.

The US economic growth is expected to accelerate to about 2.8 percent this year from the low twos that has been the norm for a number of years. The US 10-year yields are expected to slowly rise as the monetary policy normalizes and is likely to trade between 2.75 percent and 3.75 percent in future, meaning investors should be a little bit short in maturities expecting rates to rise and be in the front-end of the yield-curve.

With the shorter maturities, the Fed is protecting the investors and is indicating it will be doing so for at least till the middle of 2015, as one key Fed member – William Dudley of New York Federal Reserve Bank said recently, he observed.

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Invesco PowerShares, the IL-based global provider of mutual and exchange-traded funds with total assets exceeding $770 billion, has launched an international version of its wildly successful Buyback Achievers Portfolio (PKW).

PKW has nearly $3 billion in assets, making it one of the most successful broader market ETFs over the past few years and has comfortably outperformed the S&P 500 index during the current market advances.

The newly launched PoweShares International BuyBack Achievers Portfolio (IPKW) adds to the so-called line up of PowerShares’ 40 smart-beta funds. Smart-beta funds typically choose a broad-based index and screen it for qualitative and quantitative factors to boost returns.

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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/2014/03/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-03062014/

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Market Commentary

Friday, March 7, 2014

WEEKLY RECAP; PAYROLL REPORT KEEPS MARKETS STABLE

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

The S&P 500 continued its climb today to close at another all-time high, still feeding off the favorable jobs reports that were released this week. The official monthly payroll report that was published today helped markets rally in early trading. Employers added 175,000 jobs in February, well in excess of the past two months and more than many observers had anticipated. The unemployment rate ticked up to 6.7%, but the increase was due mostly to a healthy rise in the labor force.

Let’s recap what happened this week. Stocks overcame a sharp pullback in response to a growing crisis in Ukraine and ended the week higher. After a sell-off on Monday, the Standard & Poor’s 500 Stock Index moved back into record territory on Tuesday and held onto its gain through much of the rest of the week.

The movement of Russian troops into Ukraine’s Crimea over the weekend rattled the world markets on Monday. Many investors moved to safer assets, and the stock market suffered as a result. Russia is a major supplier of oil and gas to Europe, and the prospect of sanctions or other disruptions sent the price of both commodities up sharply. Stock prices rallied on Tuesday, however, as Russian President Vladimir Putin seemed to indicate that Russia did not intend to annex Crimea and had no immediate plans for military action.

Emerging markets debt posted good returns when tensions between Russia and Ukraine began to subside. Investors closely watched China’s bond market, where a solar-equipment company missed an interest payment on Friday. This was the first time that the Chinese government has allowed an onshore, local-currency bond to default, and will likely cause investors to more accurately price credit risk in Chinese corporate bonds.

On the currency front, the U.S. dollar was weaker against the major currencies for the week.

Our 10 ETFs in the Spotlight edged higher for the week with 3 of them making new highs today while 9 of them are now showing gains YTD.

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ETF/Mutual Fund Data updated through Thursday, March 6, 2014

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: BUY — since 10/25/2011

Our main directional indicator, the Domestic Trend Tracking Index (TTI), broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. The clear break to the upside occurred on 10/24/11 and, effective 10/25/11, a new Buy signal for domestic equities went into effect.

As of today, our TTI (green line in above chart) has bounced off its long term trend line (red) by +4.69%.

To avoid a potential whip-saw, a Sell signal to move out of all domestic equity positions will be generated once we have clearly pierced the line to the downside. Be sure to tune in for the latest updates.

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