By J Clinton Hill, Capital Markets Strategist @ Hillbent.com
ETF Market Commentary
Tuesday’s economic data was quite strong as GDP for 3Q-2016, Case-Shiller’s October-2016 HPI and Consumer Confidence for November-2016 exceeded analysts’ expectations. All the major US equity indexes- e.g. SP-500 (SPY), Nasdaq-100 (QQQ) and Dow-30 Industrials (DIA) -rebounded from yesterday’s losses. The one lone exception was the Russell-2000 (IWM), which is beginning to negatively diverge from the broader markets. Energy (XLE), despite the 3.2% GDP report and prospects of a stronger economy, also continued to weaken in sympathy with crude oil prices declining on concerns of a global surplus.
Just as small-caps were overbought, 20+ Year Treasury Bonds (TLT) have been oversold. Therefore, today’s positive economic data had no impact on 10-Year Treasury Rates which are currently fading resistance levels. Again, I emphasize the sentiment shift in the bond market is a minor correction, thus having minimal impact on the cyclical bearish outlook for fixed income assets.
If one is looking for alpha in alternative assets, Commodities (DBC), e.g. Gold (GLD) and Oil (USO), failed to deliver in deference to a stronger US Dollar (UUP) currently consolidating since its post-election breakout. Instead, Real Estate (IYR) appears to be attracting buyers and finding support at its June-2015 lows and attempting a bullish reversal from its downtrend for the time being. Then again, the 4.36% divided yield could also be helping its cause as well.
That’s all for today. Wednesday calendar will shed more insight on the economy and most likely support the Federal Reserves’s bias towards tightening monetary policy.
- Residential Real Estate: Pending Home Sales Index and weekly Mortgage Bankers’ Application Index.
- November’s Employment Situation: ADP’s private payrolls should give us a decent read on.
- Energy Markets: EIA Petroleum Status and Inventories report.
- Other Key Economic Data: Beige Book report and ISM Chicago PMI report.
(Please refer to our ETF summary table below for a performance analysis of asset classes.) Signing off @ Hillbent…
|RS 1Yr||Exchange Traded Fund||Last||Chg||% Chg|
|99||DJ-30 Industrials (DIA)||191.19||0.41||0.21%|
|73||Emerging Mkts (EEM)||35.44||0.05||0.14%|
|35||Europe FTSE (VGK)||45.94||0.40||0.88%|
|72||Latin America 40 (ILF)||27.76||-0.48||-1.70%|
|88||Pacific Ex-Japan (EPP)||41.35||0.08||0.19%|
|85||FTSE China 25 (FXI)||37.46||0.23||0.62%|
|0||VIX Short-Term Futures (VXX)||27.98||0.07||0.25%|
|Major Equity Sectors|
|97||Consumer Discretionary (XLY)||82.54||0.22||0.27%|
|47||Consumer Staples (XLP)||51.40||0.07||0.14%|
|32||Real Estate (XLRE)||30.38||0.21||0.70%|
|98||Technology / Info (VGT)||121.69||0.15||0.12%|
|Bonds & Fixed Income|
|13||20+ Yr Treasury (TLT)||122.22||0.51||0.42%|
|19||Aggregate Bond Fund (AGG)||108.67||0.12||0.11%|
|52||Treasury Inflation Protection (TIP)||113.40||0.11||0.10%|
|39||Investop Corp Bond (LQD)||117.28||0.16||0.14%|
|84||High Yield Corp Bond (HYG)||85.61||-0.11||-0.13%|
|5||Pimco Intermed Muni Bonds (MUNI)||52.40||-0.49||-0.93%|
|3||High Yield Muni (HYD)||29.09||-0.21||-0.72%|
|90||US Dollar Bullish (UUP)||26.11||-0.06||-0.23%|
|11||Euro Trust (FXE)||103.50||0.39||0.38%|
|40||Japanese Yen Trust (FXY)||85.80||-0.29||-0.34%|
|79||DB Commodity Index (DBC)||14.76||-0.30||-1.99%|
|43||US Oil (USO)||10.06||-0.38||-3.64%|
|50||DJ Real Estate (IYR)||75.80||0.62||0.82%|
|75||DJ Home Construction (ITB)||27.93||0.21||0.76%|
|34||Residential Real Estate Index (REZ)||60.05||0.45||0.76%|
Signing off @ Hillbent…
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