ETF/No Load Fund Tracker StatSheet
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Friday, January 11, 2013
STOCK INDEXES FINISH HIGHER FOR THE SECOND STRAIGHT WEEK; EUROPEAN EQUITIES SLIP
US stock indexes changed little Friday, a day after the S&P 500 index rose to a five-year high as investors digested news of weak bank earnings and higher Chinese inflation. The CBOE Volatility Index fell to its lowest since June 2007.
Banks retreated the most after Wells Fargo, the largest US home lender, slipped 0.9 percent as fourth quarter mortgage applications declined and margins narrowed even as the bank took a bigger share of mortgage and commercial markets while betting on an economic revival.
Domestically, stock funds showed a huge inflow at the beginning of the year, the fourth largest since 1992. From a contrarian point of view, this rise in bullish sentiment could very well mark the end of the bullish cycle and trigger a sharp reversal.
Supporting that view was Paul Farrell’s piece titled “Washington ‘clowns’ set up 42% stock market drop.” While I don’t always agree with Paul’s viewpoint, much of what he wrote today goes along with my thinking.
The Dow Jones Industrial Average (DJIA) added 17 points to end at 13,488 while the S&P 500 Index (SPX) was nearly unchanged at 1,472, up 0.4 percent for the week. Treasury prices rose Friday, dragging the yields down from their highest level in eight months as worries over the country’s economy boosted demand for safe haven assets.
Meanwhile, the US dollar declined against the euro on Friday over optimism that the 17-member currency zone will return to growth by the end of this year. Good luck with that, as I have not seen any numbers in the recent past supporting an economic rebound in the Eurozone.
European equities witnessed a mixed trading session Friday as investors grew worried rising Chinese inflation will curb monetary easing by the nation’s central bank.
In Japan, the Cabinet Office said it would spend 10.3 trillion yen to drag the economy out of its third recession in five years. The stimulus is expected to create 600,000 jobs and increase domestic output by two percent, the statement added.
Our Trend Tracking Indexes (TTIs) headed higher and closed the week as follows:
Domestic TTI: +2.73% (last week +2.35%)
International TTI: +10.16% (last week +9.26%)
Earnings season will heat up next week and may provide more fuel to continue upward momentum, especially if Wall Street continues to ignore bad news while the late afternoon centrally planned lift-a-thon contributes the necessary assist to be sure equity indexes do not close in the red—no matter what.
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 Joyce:
Q: Ulli: How do you find Highs for a particular fund or ETF?
I was looking at your 7 ETF Model (12/31/2012) and I was just trying to figure out how all the numbers on the spreadsheet. I am not sure how you figure the number in High column.
The numbers I got from Yahoo Finance don’t match up with yours. For example, XLU and PPH all have had higher highs in previous year.
A: Joyce: If you buy an ETF or Mutual Fund, you are only concerned about the highs that are being made since your purchase date.
For the model portfolios, I use the highs since their re-balance date on 12/31/11. I track any changes on a daily basis and update the models as necessary. Once a dividend occurs, you need to reduce the high price by that amount. That’s why you could not match up my numbers.
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