View From the Hill: Stocks Making Record Highs On Oil Rally

Posted on Posted in Views From The Hill

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

Market Commentary: August 15, 2016

bulls-and-bears4Record highs still defy the seasonal patterns of a summer selloff. Much credit can be given to central banks which have accommodated the markets with low-interest rates, asset purchases, and other stimulus measures.

Earnings season is almost over as most of the S&P 500 components have already reported and 77% of them have beaten consensus estimates. Energy prices, which earlier this year influenced the market with its bullish and bearish move before decoupling from equities, are resuming their leadership role. In addition to oil prices, a data dependent Federal Reserve, will also share the stage until the presidential election and the uncertainty it brings becomes more of a factor.

No further comments this evening. (Please see our ETF summary and performance table below.)

 


ETF Performance Summary: August 15, 2016

  • Equities: The steady performance of US blue chip and large cap stock indexes treated investors to another price breakout after last week’s consolidation. However, the appetite for riskier assets may be increasing as the Russell-2000 (IWM), Brazil (EWZ), Emerging Markets (EEM) and China (FXI) distinguished themselves with superior performance.
  • Bonds: High Yield (HYG) attracted risk capital as well and was the only positive performer in our fixed income universe. Otherwise, bonds have been in correction mode and are preparing to test support at their 50-day moving averages. Monitor these closely as a break below this level without a snap-back could signal an extended move and long overdue inflection point in the bond market.
  • Currencies: Both the Dollar (UUP) and Euro (FXE) are still correcting while the Yen (FXY) consolidates.
  • Commodities: The DB Commodities Index (DBC), thanks to US Oil (USO), has broken its downtrend. Of course, the prospect for higher oil prices is tied to any cooperation amongst OPEC members and Russia at an informal meeting scheduled in September whereby the group will explore stabilizing energy prices going forward. The USO has enjoyed increased 7 out of the last 9 trading sessions and about to test resistance at its 50-day moving average. Meanwhile, Gold (GLD) is consolidating its gains and maintains its short-term bullish uptrend.
  • Real Estate: The Home Construction Builders Index (ITB) was up almost 1% on a positive Housing Market Index report. The DJ Real Estate Index (IYR) and Residential Real Estate Index (REZ) were relatively unchanged.

 

 

1YR RS Equities Close % Chg 50D-MA 200D-MA 50-v-200
 Equities
99 DJ-30 Industrials (DIA) 186.52 0.33% 2.85% 6.65% 3.70%
99 SP-500 (SPY) 219.09 0.29% 2.96% 6.94% 3.86%
99 Nasdaq-100 (QQQ) 117.70 0.43% 5.81% 8.23% 2.29%
99 Russell-2k (IWM) 123.40 0.99% 4.73% 10.46% 5.48%
63 EAFE (EFA) 59.04 0.39% 3.69% 3.07% -0.59%
99 Emerging Mkts (EEM) 37.87 1.04% 8.08% 14.14% 5.61%
53 Europe FTSE (VGK) 49.09 0.31% 3.59% 1.53% -1.99%
99 Latin America 40 (ILF) 29.56 1.55% 11.21% 23.42% 10.98%
99 Brazil (EWZ) 34.84 1.10% 13.41% 36.63% 20.47%
80 Japan (EWJ) 12.40 0.57% 5.08% 5.80% 0.68%
98 Pacific Ex-Japan (EPP) 42.04 0.62% 4.66% 9.42% 4.55%
79 FTSE China 25 (FXI) 37.96 2.26% 9.33% 12.14% 2.57%
1 VIX Short-Term Futures (VXX) 36.34 -1.65% -26.88% -49.99% -31.60%
Fixed Income & Bonds
81 20+ Yr Treasury (TLT) 138.76 -0.94% 0.44% 7.08% 6.61%
85 Aggregate Bond Fund (AGG) 112.43 -0.18% 0.15% 2.00% 1.84%
79 Treasury Inflation Protection (TIP) 115.79 -0.26% -0.25% 2.40% 2.65%
91 Investop Corp Bond (LQD) 123.38 -0.31% 0.76% 4.68% 3.89%
100 High Yield Corp Bond (HYG) 86.57 0.30% 2.09% 5.34% 3.19%
Currencies
34 US Dollar Bullish (UUP) 24.71 -0.16% -0.16% -1.36% -1.20%
49 Euro Trust (FXE) 108.98 0.24% 0.27% 0.62% 0.35%
95 Japanese Yen Trust (FXY) 95.42 -0.03% 2.54% 10.50% 7.77%
Commodities
75 DB Commodity Index (DBC) 14.80 1.65% -0.40% 6.55% 6.98%
89 Gold (GLD) 127.84 0.35% 1.42% 10.54% 8.99%
36 US Oil (USO) 10.76 2.48% -1.47% -0.46% 1.02%
Real Estate
89 DJ Real Estate (IYR) 83.60 -0.07% 1.60% 9.05% 7.33%
88 DJ Home Construction (ITB) 29.00 0.97% 2.33% 8.41% 5.94%
87 Residential Real Estate Index (REZ) 67.41 -0.01% 0.96% 6.04% 5.03%
Equity Sectors
99 Consumer Discretionary (XLY) 82.16 0.20% 2.83% 5.25% 2.36%
91 Consumer Staples (XLP) 54.95 -0.25% 0.66% 5.65% 4.96%
88 Energy (XLE) 69.25 0.80% 2.20% 8.78% 6.44%
81 Financials (XLF) 24.02 0.67% 3.36% 4.57% 1.18%
92 Healthcare (XLV) 74.91 0.17% 2.49% 6.65% 4.06%
99 Industrials (XLI) 58.95 0.67% 3.15% 8.22% 4.92%
98 Materials (XLB) 48.91 1.01% 2.41% 9.08% 6.51%
99 Technology / Info (VGT) 118.01 0.57% 6.16% 9.90% 3.52%
78 Telecom (IYZ) 32.59 -0.03% -1.42% 7.38% 8.93%
76 Utilities (XLU) 50.12 -1.53% -2.43% 5.89% 8.54%

 

Signing off at Hillbent…

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