Perhaps not in the order of importance Bully frets about higher interest rates, the end of QE, economic troubles lingering in China which in turn negatively affects emerging markets, Russian sanctions, the referendum in Scotland, war and peace, the higher dollar and its negative impact on overseas markets and alternative investments, over extended stock prices and hey, did I mention interest rates?
So markets are gradually rolling over and technically that double top in the Dow is a problem since the set-up is almost perfect for a correction. This week markets are complying with the worries noted above.
U.S. economic data included Retail Sales 0.6% vs 0.6% expected & prior 0.3%. Less Autos & Gas Retail Sales readings were 0.5% vs 0.4% & prior 0.3%. Consumer Sentiment rose to 84.6 vs 83.4 expected & prior 82.5. Business Inventories were in line at 0.4% vs 0.4% expected & prior 0.4%.
Meanwhile in China investors struggled with new that credit growth was weaker than expected causing more selling there and in emerging markets.
Leading market sectors higher included: Banks (KRE), Russia (RSX) and not much else.
Leading market sectors lower included: Gold Miners (GDX), Small Caps (IWM), Energy (XLE), Healthcare (XLV), Utilities (XLU), Biotech (IBB), Homebuilders (ITB), Semiconductors (SMH), Materials (XLB), Emerging Markets (EEM), China (FXI), Taiwan (EWT), Australia (EWA), Germany (EWG), Turkey (TUR), Brazil (EWZ), Hong Kong (EWH), Multi-Asset Dividend ETF (CVY), Gold (GLD), Silver (SLV), Crude Oil (USO), Bonds (TLT), Corporate Bonds (LQD), Commodity Tracker (DBC) and Agriculture (DBA).
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume was heavy as is typical on sell days when stops are hit. Breadth per the WSJ was quite negative—note Financials in Money Flow below.
All things considered the proverbial “wall of worry” just got a little too steep for even da boyz to deal with. Clearly absent any other geopolitical events (including the vote in Scotland) investors will key on the Fed next week Wednesday.
Let’s see what happens.
Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001.
He is the author of "Create Your own ETF Hedge Fund: A Do-It-Yourself Strategy for Private Wealth Management" published by Wiley Finance and "The Best ETFs: U.S. Equities, A Companion Guide to Building Your ETF Portfolio".