Tag Archives: nasdaq

Market Lab Report – Premarket Pulse 5/2/16

Major averages fell Friday on higher, above average volume. Earnings continue to falter especially among big cap technology names, and overall, S&P 500 earnings continue to slow. This has marked major market tops in the past such as in 2000 and 2007. This time, however, the wildcard is QE which could continue to push markets higher. That said, QE in and of itself seems to lack the thrust of previous years such as 2009-2014 when QE 1, 2, 3 and Operation Twist were launched. The difference now is that QE is coming from global central banks and not the US Federal Reserve. And the negative interest rate environment in Europe and Japan does not seem to be helping to resuscitate their economies, but instead is creating imbalances in vehicles such as pension and insurance funds. Indeed, the current rally which began mid-February could be nearing its end as major indices near old highs. Sharp rallies were observed in late 2014 and late 2015, both which fizzled out once the major averages approached old highs. Further, the pronounced number of distribution days could lead to further selling. A number of big-stock NASDAQ names, such as AAPL, NFLX, GOOG, and MSFT, have weakened over the past two weeks, and this type of action was coincident with tops seen in last July and early January of this year. If the selling among these big-stock names spreads further, it will likely have negative implications for the general market. Controlling risk is the most important rule in investing. Should the current correction continue, keeping stops tight and restricting buys to only the best risk/reward entries is wise. But should QE create merely a shallow floor in the current correction with a resumption of the uptrend, new buy opportunities should emerge in the form of pocket pivots and buyable gap ups. Employing the various buy/sell strategies we have discussed in weekend updates with members is key in this QE-manipulated environment.

Quiet Week For Equities Doesn’t Stop Equity Fund Redemptions

By Jeff Tjornehoj Equity markets were flat for the fund-flows week ended Wednesday, April 27. The Dow Jones Industrial Average moved only a little more than 100 points between its highest and lowest closes and finished the week down 55 points (or minus 0.3%). This past week equity exchange-traded fund (ETF) authorized participants were responsible for sending about $3.2 billion into SPDR S&P 500 Trust ETF (NYSEARCA: SPY ) and $487 million into the iShares Russell 2000 ETF (NYSEARCA: IWM ) while pulling $675 million from the Consumer Staples Select Sector SPDR ETF (NYSEARCA: XLP ). As is their habit these days, equity mutual fund investors pulled $4.5 billion (net) from their funds and brought the year-to-date equity mutual fund outflows to $18.3 billion. High-yield fund investors were of different minds this week: High-yield mutual funds saw net inflows of $555 million, while high-yield ETFs saw net outflows of $258 million. Bond ETFs gathered $260 million of net inflows. The week’s biggest individual bond ETF net inflows belonged to the iShares Core Total U.S. Bond Market ETF ( AGG , +$242 million). Municipal bond mutual fund investors added a whopping $1.1 billion net to their accounts, which was the highest amount since the last week of 2015. As seasonal tax payments ebbed, money market funds saw net inflows of $5.0 billion for the week.