ETF/No Load Fund Tracker Newsletter For Friday, November 2, 2012
ETF/No Load Fund Tracker StatSheet
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Friday, November 2, 2012
US STOCKS SLAMMED AFTER THURSDAY’S RUN-UP; WORRY PREVAILS AHEAD OF PRESIDENTIAL ELECTIONS; EUROPE RISES ON US JOBS DATA
US equity indexes sank Friday to cap a truncated trading week with steep losses as cheer over better-than-expected employment data was offset by nervousness ahead of next week’s presidential election.
Markets were buoyed by employment data earlier that showed the US economy created more jobs than expected in October, the last significant piece of economic data before the country goes to the polls next week. Nonfarm payrolls gained by 171,000 in October, more than the 125,000 projected by most economists. Hiring also picked up faster than estimated in the preceding two months than previously believed, the report showed.
The unemployment rate, calculated from a separate survey of about 60,000 households, ticked higher to 7.9 percent from 7.8 percent in September, indicating a rise in labor force participation, which was in line with expectations.
After a 5.2 percent drop in August, factory orders climbed 4.8 percent in September. However, jitters soon gave way to optimism ahead of Tuesday’s presidential and Congressional elections.
After logging a 1.04 percent gain yesterday, the Dow Jones Industrial Average (DJIA) tumbled 139 points to finish at 13,093, off 0.1 percent for the week. The S&P 500 Index (SPX) shed 13 points to close at 1,414 with energy and materials faring the worst and all the 10 industry groups finishing in the red. The index is, however, up 0.2 percent for the week.
Treasuries finished mostly flat, erasing losses posted earlier after an employment report showed jobs rising at a faster clip than estimated while average hourly earnings remained unchanged. The benchmark 10-year yield on Treasury notes ended unchanged 1.72 percent while yield on 30-year Treasury bond jumped two basis points to 2.92 percent.
The dollar rose Friday as the latest jobs data spurred doubts the US Fed may not extend its asset purchase program beyond what has been already committed to.
Meanwhile, across the Atlantic, European stocks got a boost on stronger-than-expected US jobs data. The Stoxx Europe 600 index jumped 0.4 percent to end at 274.85, up 1.6 percent for the week.
In Frankfurt, the German DAX 30 index added 0.4 percent, pushing the index higher by 1.8 percent for the week. Deutsche Telekom AG fell more than three percent after German daily Handelsblatt reported the telecom operators dividend payouts may drop by a third next year.
The CAC 40 index rose 0.5 percent in Paris after Societe Generale SA rallied 1.5 percent. The index is up 1.7 percent for the week. Following an upgrade from neutral to buy by Goldman Sachs, Veolia Environment SA rose 1.1 percent.
Up 1.1 percent for the week, the FTSE 100 index managed to add 0.1 percent after banks and resource firms turned higher.
Our Trend Tracking Indexes (TTIs) held fairly steady during the “Sandy” shortened week, and we’re still on the plus side of the trend lines as follows:
Domestic TTI: +1.34% (last week +1.25%)
International TTI: +3.24% (last week +2.79%)
Have a great week.
READER Q & A FOR THE WEEK
All Reader Q & A’s are listed at our web site!
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A note from reader Dom:
Q: Ulli: After building a Portfolio, what do you do with the Sales proceeds from those funds sold after exceeding the 7% Sell Stop?
A: Dom: First, the proceeds go into the money market portion of our account.
Then you look for either other opportunities (ETFs that are trending up), or you wait for a market turnaround to reinvest. If you review the model ETF portfolios, you’ll note that we had been stopped out of various holdings, but reinvested later on as the upward trend resumed.
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