Views From The Hill

Strong GDP & Consumer Confidence Help US Equities Rebound

By J Clinton Hill, Capital Markets Strategist @ Hillbent.com

ETF Market Commentary

Bullish and Bearish ETF Market CommentaryTuesday’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.

(Please refer to our ETF summary table below for a performance analysis of asset classes.) Signing off @ Hillbent…

 


ETF Performance

 

RS 1Yr Exchange Traded Fund Last Chg % Chg
     
  Equities  
99 DJ-30 Industrials (DIA) 191.19 0.41 0.21%
98 SP-500 (SPY) 220.91 0.43 0.20%
97 Nasdaq-100 (QQQ) 118.94 0.41 0.35%
95 Russell-2k (IWM) 132.26 -0.07 -0.05%
57 EAFE (EFA) 56.85 0.36 0.64%
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%
75 Brazil (EWZ) 33.20 -0.71 -2.09%
6 Japan (EWJ) 49.97 0.05 0.10%
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%
89 Energy (XLE) 70.83 -0.88 -1.23%
55 Financials (XLF) 22.21 0.06 0.27%
51 Healthcare (XLV) 69.41 0.45 0.65%
98 Industrials (XLI) 62.33 0.05 0.08%
99 Materials (XLB) 49.41 0.05 0.10%
32 Real Estate (XLRE) 30.38 0.21 0.70%
98 Technology / Info (VGT) 121.69 0.15 0.12%
77 Telecom (IYZ) 32.59 -0.05 -0.15%
59 Utilities (XLU) 48.27 0.20 0.42%
     
  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%
     
  Currencies  
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%
     
  Commodities  
79 DB Commodity Index (DBC) 14.76 -0.30 -1.99%
42 Gold (GLD) 113.27 -0.53 -0.47%
43 US Oil (USO) 10.06 -0.38 -3.64%
     
  Real Estate  
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…

 

(For more a more detailed and extensive coverage of ETFs, please refer to our premium research service, ETF LookOut Points.)

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