ETF/No Load Fund Tracker StatSheet
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Friday, May 4, 2012
US EQUITIES SLUMP ON WEAK JOB DATA; VXX SOARS, USO SINKS
A market selloff sent the S&P 500 and the NASDAQ Composite to their lowest level in 2012 today after the US Labor Department report showed employers added fewer jobs in April than estimated.
Markets were further spooked over the upcoming French elections on Sunday, where incumbent president Nicholas Sarkozy faces tough challenge from socialist challenger Francois Hollande.
Treasuries advanced, hitting a fresh three-month high amid speculations that the US Fed would intervene to kick-start a slowing economy. Government debt ended on a high for the seventh week in a row, the longest stretch since 2008.
The Dow Jones Industrial Average (DJIA) dropped 1.3 percent, lower by 1.4 percent for the week. Political uncertainty in Europe added to the market frenzy as Greece goes to polls this weekend. All the 30 components of Dow closed lower for the day.
The S&P 500 Index (SPX) lost to end at 1369.10 with only utilities gaining while energy dropped the most among its 10 business groups. The NASDAQ Composite Index (COMP) sank 2.3 percent, its biggest single-day loss since end November. Apple Inc (AAPL) lost 6.3 percent for the week, while social-networking site LinkedIn Corp. (LNKD) soared 7.2 percent on the day in a negative market after the firm upgraded its forecast for the year.
Yield on 10-year benchmark Treasuries gave back 0.06 percentage points to 1.87 percent, the lowest level early February. 30-year bond yield slipped 0.04 percentage points to 3.07 percent, after the initial jobs report showed US employers added only 115,000 jobs in April against a median forecast of 160,000 by economists at Bloomberg.
ETFs in the news:
During a day when the markets witnessed the biggest fall, the volatility tracking ETF, the S&P 500 VIX Short-Term Futures ETN (VXX) naturally soared. VXX had a tough year thus far as all the benchmarks performed well this year. This ETF will be an interesting watch in the coming months, if today’s jobs report is any indication of things to come.
Lower jobs data drove the crude futures down on NYMEX by 4 percent, pushing oil related ETFs down. The day’s biggest loser was the United States Oil Fund (USO), losing 3.97 percent. USO witnessed a massive selloff, with the number of shares changing hands at 20 million, 3.5 times its daily average.
Other oil linked funds like the Invesco PowerShares DB Oil Fund (DBO) were also hit, shedding 4.03 percent for the day. Oil’s weakness affected other energy linked equity ETFs with the Vanguard Energy ETF (VDE) also closing down for the week and a loss of 2.20 percent on the day.
Our Trend Tracking Indexes (TTIs) headed south as well, but both remain above the line and in bullish territory, although the international TTI showed the most weakness. Here are this week’s closing numbers:
Domestic TTI: +3.99% (last week +5.38%)
International TTI: +1.53% (last week +4.00%)
Have a great week.
Disclosure: No holdings
READER Q & A FOR THE WEEK
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A note from reader May:
Q: Ulli: How far out do you anticipate a sell signal will be given for Domestic Equity Funds?
A: May: There is no way to anticipate the timing of a potential sell signal. It happens when the price line of the domestic TTI crosses its long term trend line to the downside.
However, before that happens, we will have been stopped out already via my recommended trailing sell stop discipline.
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