Views From The Hill

View From the Hill: Trump-Fed Market Momentum Will Eventually Wane

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

ETF Market Commentary

bulls-and-bears4The bullish momentum in the US Dollar (UUP) and Russell-2000 Small-Caps (IWM) continues, while investors rush for the exits on longer-term Treasury bonds (TLT). The first group is overbought and the latter is clearly oversold. The stock market’s irrational exuberance with the results of the presidential election and the abandonment of bonds in anticipation of Federal Reserve rate hikes are what I call “Trump-Fed Momentum” (pun intended).

Let’s see what next week brings. In one of Trump’s biographies, one of his maxims is “never lose your momentum”. As much as I agree with him on this, I’m afraid it does not apply to the markets. Concerning the Fed, it has little choice but to raise rates in order to maintain what credibility it still has. A number of its voting and non-voting members have been publicly jawboning the case for a rate increase. My guess, if forced to pick, is that this time they will bump up the Fed Funds target rate by 25 basis points, regardless of the color of any ensuing economic data.

Tonight’s comments are obviously brief as I shift attention towards the weekly analysis for our premium subscription reports. Enjoy the remains of the day and have a safe and happy weekend, dear readers.

Thank you for your continued support and sharing with others.

 

(Please refer to ETF summary table below for performance analysis .)

 


ETF Performance Summary

 

RS 1Yr Exchange Traded Fund Last Chg % Chg
  Equities
100 DJ-30 Industrials (DIA) 188.46 -0.31 -0.16%
97 SP-500 (SPY) 218.50 -0.49 -0.22%
91 Nasdaq-100 (QQQ) 117.32 -0.44 -0.37%
100 Russell-2k (IWM) 130.99 0.69 0.53%
92 EAFE (EFA) 56.20 -0.62 -1.09%
65 Emerging Mkts (EEM) 34.59 -0.16 -0.46%
88 Europe FTSE (VGK) 45.60 -0.47 -1.02%
67 Latin America 40 (ILF) 27.15 -0.08 -0.29%
72 Brazil (EWZ) 32.59 0.21 0.65%
24 Japan (EWJ) 49.39 -0.75 -1.50%
76 Pacific Ex-Japan (EPP) 40.21 -0.17 -0.42%
92 FTSE China 25 (FXI) 35.94 -0.03 -0.08%
24 VIX Short-Term Futures (VXX) 29.06 -0.17 -0.58%
   
  Major Equity Sectors
92 Consumer Discretionary (XLY) 81.20 -0.25 -0.31%
36 Consumer Staples (XLP) 50.50 -0.18 -0.36%
99 Energy (XLE) 71.13 0.29 0.41%
12 Financials (XLF) 22.16 0.00 0.00%
0 Healthcare (XLV) 69.70 -0.75 -1.06%
100 Industrials (XLI) 61.30 -0.02 -0.03%
91 Materials (XLB) 48.32 -0.07 -0.14%
4 Real Estate (XLRE) 29.71 0.06 0.20%
99 Technology / Info (VGT) 120.39 -0.28 -0.23%
65 Telecom (IYZ) 31.30 0.24 0.77%
3 Utilities (XLU) 46.29 -0.14 -0.30%
   
  Bonds & Fixed Income
8 20+ Yr Treasury (TLT) 120.85 -0.35 -0.29%
14 Aggregate Bond Fund (AGG) 108.37 -0.35 -0.32%
51 Treasury Inflation Protection (TIP) 113.32 -0.17 -0.15%
94 Investop Corp Bond (LQD) 116.59 -0.66 -0.56%
77 High Yield Corp Bond (HYG) 84.63 0.00 0.00%
8 Pimco Intermed Muni Bonds (MUNI) 52.88 0.10 0.19%
15 High Yield Muni (HYD) 29.74 0.34 1.16%
   
  Currencies
98 US Dollar Bullish (UUP) 26.19 0.09 0.34%
91 Euro Trust (FXE) 102.94 -0.35 -0.34%
47 Japanese Yen Trust (FXY) 87.08 -0.67 -0.76%
   
  Commodities
76 DB Commodity Index (DBC) 14.67 0.12 0.82%
88 Gold (GLD) 115.15 -1.02 -0.88%
45 US Oil (USO) 10.32 0.19 1.88%
   
  Real Estate
39 DJ Real Estate (IYR) 73.68 0.22 0.30%
92 DJ Home Construction (ITB) 27.45 0.11 0.40%
84 Residential Real Estate Index (REZ) 58.48 0.02 0.03%

 

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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