View From the Hill: Buyer Fatigue And Not Fear of Rate Hikes Drives Markets Lower

Posted on Posted in Views From The Hill

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

Market Condition: September 9, 2016

bulls-and-bears4While I certainly take pride in my market timing abilities, I have never attempted to make such a closely timed call and nor do I ever endeavor. On Thursday, I wrote of the market approaching an inflection point and being more vulnerable to a correction. In another article, I also noted that the percentage of S&P 500 components trading above their 50-day moving average was waning and underscored that as a market weighted index, a break in any of the current 9 mega-cap stocks disproportionately supporting the market could create a selloff and that is more or less what happened. With utmost humility, I hereby acknowledge the favor of the gods and leave it at that.

Perhaps even more important is why the market rout in stocks and bonds occurred. Some believe Jeff Gundlach, famed investor and founder of Doubleline Capital, responsible as he jawboned the possibility of a surprise rate hike in September. I am not among them.  The likelihood of such is an extremely low probability as indicated by the price action in Fed Futures contracts and the global landscape of mixed economic data. Instead, whether one wishes to accept or not, the market doesn’t always need a legitimate reason to go up or down and it merely comes down to a matter of buyer or seller fatigue, by which I deem the former guilty as charged.

No further comments this evening. (Please see our exchange traded fund summary below for a capital markets performance analysis.)

 


ETF Market Performance: September 9, 2016

 

RS 1Yr Exchange Traded Fund Last Chg % Chg
  Equities      
82 DJ-30 Industrials (DIA) 180.91 -3.92 -2.12%
84 SP-500 (SPY) 213.32 -5.19 -2.38%
81 Nasdaq-100 (QQQ) 114.28 -2.95 -2.52%
87 Russell-2k (IWM) 121.23 -3.96 -3.16%
67 EAFE (EFA) 58.53 -1.16 -1.94%
85 Emerging Mkts (EEM) 36.69 -1.32 -3.47%
61 Europe FTSE (VGK) 48.86 -1.07 -2.14%
83 Latin America 40 (ILF) 27.71 -1.38 -4.74%
87 Brazil (EWZ) 33.07 -2.03 -5.78%
87 Japan (EWJ) 12.33 -0.20 -1.60%
85 Pacific Ex-Japan (EPP) 40.80 -0.99 -2.37%
81 FTSE China 25 (FXI) 38.23 -0.79 -2.02%
6 VIX Short-Term Futures (VXX) 38.88 5.37 16.03%
         
  Major Equity Sectors      
73 Consumer Discretionary (XLY) 78.43 -1.94 -2.41%
65 Consumer Staples (XLP) 52.69 -1.47 -2.71%
90 Energy (XLE) 69.76 -2.04 -2.84%
83 Financials (XLF) 24.07 -0.44 -1.80%
66 Healthcare (XLV) 71.51 -1.45 -1.99%
82 Industrials (XLI) 57.12 -1.65 -2.81%
84 Materials (XLB) 47.44 -1.42 -2.91%
86 Technology / Info (VGT) 115.82 -2.79 -2.35%
68 Telecom (IYZ) 31.60 -1.08 -3.30%
62 Utilities (XLU) 48.46 -1.89 -3.75%
         
  Bonds & Fixed Income      
68 20+ Yr Treasury (TLT) 135.52 -2.27 -1.65%
73 Aggregate Bond Fund (AGG) 111.73 -0.49 -0.44%
71 Treasury Inflation Protection (TIP) 115.08 -0.80 -0.69%
77 Investop Corp Bond (LQD) 121.82 -0.92 -0.75%
89 High Yield Corp Bond (HYG) 85.76 -0.84 -0.97%
76 Pimco Intermed Muni Bonds (MUNI) 54.81 -0.17 -0.31%
92 High Yield Muni (HYD) 32.24 -0.04 -0.12%
         
  Currencies      
31 US Dollar Bullish (UUP) 24.64 0.07 0.28%
62 Euro Trust (FXE) 109.29 -0.32 -0.29%
85 Japanese Yen Trust (FXY) 94.05 -0.16 -0.17%
         
  Commodities      
71 DB Commodity Index (DBC) 14.65 -0.23 -1.55%
86 Gold (GLD) 126.71 -0.88 -0.69%
34 US Oil (USO) 10.59 -0.37 -3.38%
         
  Real Estate      
70 DJ Real Estate (IYR) 79.86 -3.30 -3.97%
73 DJ Home Construction (ITB) 27.75 -1.13 -3.91%
64 Residential Real Estate Index (REZ) 64.22 -2.42 -3.63%

 

Signing off @ Hillbent…

 

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

Leave a Reply

Your email address will not be published. Required fields are marked *