One minute markets are down big and the next up big.
It’s been that kind of action the past week or so. Until it’s proved differently markets are just moving like they did in February with many of the same issues present. Throw Russian action into the mix and markets become more event driven.
U.S. economic data was weak as the Empire State Mfg Survey was only 1.29 vs 7.5 expected & prior 5.61 with many blaming weather as a factor. But that excuse is becoming inappropriate and tiresome. The Housing Market Index was basically flat at 47 vs 49 expected & prior revised lower from 47 to 46. Lastly Janet Yellen threw some cold water on conditions by stating some banks will need to add more capital. For many banks, this is both negative and no easy thing to do.
Sure we have Putin orchestrating a Ukraine crisis by having some of his coons simultaneously seize police departments in various areas of Eastern Ukraine. Ukraine jets are in the air and injuries and damages are present. Obama will send Biden to Kiev next week to do what exactly?
Meanwhile China’s broadest measure of new credit dropped precipitously 19% in March and M2 money supply dropped to 12.1% from 13.3%. To many analysts this means GDP growth probably dropped to an anemic, by Chinese standards, to less than 7.3% which is around the lows of a dismal 2009. This kind of news hit emerging markets hard causing drops in many separate markets.
Markets opened higher then fell sharply only to turn the corner higher by early afternoon as investors are left to watch the roulette wheel in spin mode. It was also a day when equity sectors reversed positions as previously leading Emerging Markets fell sharply while U.S. sectors rallied. Or as Batman famously put it to Robin: “Izquierda a la derecha”.
Leading market sectors higher included: Financials (XLF), Energy (XLE), REITs (IYR), Healthcare (XLV), Utilities (FXU), Transports (IYT), Biotech (IBB), Semiconductors (SMH), SPDR Pharma (XPH), Bonds (TLT) and Small Cap Value (VBR).
Leading market sectors lower included: Gold Miners (GDX), Gold (GLD), China (FXI), Brazil (EWZ), Mexico (EWW), India (EPI), Russia (RSX), Emerging Markets (EEM), Germany (EWG), EAFE (EFA), Turkey (TUR), Europe (VGK), Solar (TAN), Silver (SLV) and Base Metals (DBB).
Chart of the Day: iShares China 25 Large Cap ETF (FXI) is displayed below on a weekly chart. Note two reasonably (not perfect) high (HI) and low (LO) indicators with the first in late September 20, 2013 and the next February 14, 2014. If trading FXI, these produced decent returns. We have no position in FXI.
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume was heavy especially on early selling. Breadth per the WSJ was modestly positive.
One notion about today’s rally corresponded with Japan’s central bank stating they may reduce interest rates further. Does that make sense to you? I thought not.
Wednesday is more chatter from Janet Yellen and some have even stated she needed to “re-introduce” herself to markets. Really? Is confidence in her that low? Wednesday also features Housing Starts (pay attention to starts vs permits), Industrial Production and the Fed’s Beige Book.
The game of beating much lower earnings reports is better than fantasy sports. I noticed even CNBC keeps a scoreboard of companies beating analysts’ estimates. How crazy is that?
Let’s see what happens.
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Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com
|WTI Crude Futr||104.61||0.86||0.83 %||08:54|
|US Dollar||79.85||-0.02||-0.02 %||09:23|
|Brazil||2279.949||-3.28 %||0.80 %||2.79 %|
|Russia||624.549||-3.23 %||-7.23 %||-20.63 %|
|India||439.997||-0.49 %||0.17 %||8.03 %|
|China||59.590||-1.93 %||0.32 %||-5.57 %|