The defensive posture taken by Sabrient’s fundamentals-based SectorCast-ETF model has allowed the long/short model portfolio to prosper in the face of the market weakness we’ve seen over the past week. The formerly hot Materials sector had begun to show signs of cooling off last week even as the overall market was hitting new highs, and over the past week it fell hard.
Also, I said last week that I was eager to see how the perennially top-ranked Healthcare sector would react to the Scott Brown victory in the Massachusetts senatorial election, and in fact it has sold off a bit more than the SPY…and dropped in our rankings for the first time in a quite awhile. Read more…
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Perhaps it was the new senator from Massachusetts who let the bears out, but I suppose it was a bit more than that. When the week began on Tuesday, after the Martin Luther King holiday, the bulls were grazing happily on GARP stocks, as contented as California cows. But then somebody opened that gate, and the bears roared through and the bulls ran for cover.
It wasn’t exactly a massacre, but it was far from pretty. Consider that the best style/cap, Small-cap Value, was down 4.3% and the worst, Large-cap Value, was down 5.2%. Obviously, all style/caps were ravaged, and the week’s carnage wiped out everything we had accomplished since Santa Claus came in December. Read more…
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Categories: What the Market Wants Tags: AAPL, AMTD, AZO AFL, BAC, C, EGAY, Manic Mondays, MS, NTRS, NVO, PH, RIMM, SCHW, sectors, WFC
Several comments to this week’s article on SeekingAlpha (“What the Market Wants: A Week of Murk and Fog”) have prompted me to make a few points of clarification.
First, regarding the controversy over my comment about “cash on the sidelines,” Sabrient uses a proprietary formula to track this very thing, with a combination of mutual fund cash, money market cash (cash that is frequently in the market instead of in money market funds), cash available from pension and endowment funds, short interest in the aggregate, and estimates of foreign funds available for domestic markets. We use this information internally, but not in any significant way since we normally are agnostic to short-term (less than one year) market direction. It is my personal opinion that there is a larger than normal amount of such cash on the sidelines at this point in time, and in my article was commenting that such cash was probably responsible for inexplicable bullish reactions to bearish news days. Read more…
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Despite its value orientation making it take a relatively defensive posture, Sabrient’s fundamentals-based SectorCast-ETF model has been performing well even as the market continues to hit new highs. This is because leadership has swung to traditionally defensive sectors like Healthcare, which continues to score at the top of the rankings while also showing strong momentum. With the Massachusetts election victory of Republican Scott Brown putting in doubt the Obama administration’s healthcare plan, I’m eager to see how healthcare stocks react. Read more…
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Last week brought us murk and fog in an otherwise bright New Year. All style/caps were down for the week, though not drastically. The worst was Small-cap Growth (- 1.12%); the best was Large-cap Growth (-0.6%); and the rest crowded between these uninspiring returns. But given the tremendous amount of cash on the sidelines, the market seems unlikely to turn disastrous.
It could have been worse. Alcoa (NYSE: AA), Monsanto (NYSE: MON) and Chevron (NYSE: CVX) disappointed badly early in the week, although Intel (Nasdaq: INTC) brought in pleasing numbers later in the week. Government statistics were for the most part dismal — worse-than-expected numbers for trade balance (-36.4 B), initial job claims (+11,000 to 444,000) and retail sales (-0.3%). Even consumer sentiment was poor (flat, actually, at 72.8 vs. December’s final 72.5), probably a reflection of the other disappointing statistics. Only the consumer price index (CPI) was encouraging, increasing just 0.1% in December, after a 0.4% rise in November. Although Europe is beginning to struggle with inflation, the U.S. isn’t having that problem yet. Read more…
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Categories: What the Market Wants Tags: AA, AMED, BCO, C, CIG, CVX, GOOG, IBM, INTC, MANT CIG, MON, SYNA, TEL
The Claymore/Sabrient Insider ETF (NFO) has come to the attention of the ETF Professor after receiving the prestigous four-star rating from Morningstar:
One such offering is the Claymore/Sabrient Insider ETF (NYSE: NFO). NFO is an ETF that focuses on stocks that are looking attractive to “insiders” such as company executives, fund managers
and sell side analysts.
Read more…
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In my last post I was rhapsodic about the “undiscovered country” — or the future some people call it. Lately, I have had a chance to review some of my saved bookmarks and ran across a December 9th article by Rex Nutting on MarketWatch entitled: Fed expected to lower rates despite raging inflation from MarketWatch. My goal is not to single out this one reporter as being an inflation “nutter” but just to remind ourselves what the general mood was at the time.
And most certainly there were inflation nutters as well as stagflation hawks (vultures more like it) who were predicting rising inflation levels. But for the most part these were based just on headline inflation (food and fuels rising faster than normal). When pressed for details, the nutters came around to talking about M3 monetary aggregate. Let me illustrate with a few paragraphs from Nutting’s article: Read more…
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Two exchange-traded funds that track Sabrient quantitative indexes passed their 3-year anniversaries in late 2009 and received prestigious 4-STAR Morningstar ratings.
The Claymore/Sabrient Insider ETF (NYSE Arca: NFO) and the Claymore/Sabrient Defensive Equity ETF (NYSE Arca: DEF) track the Sabrient Insider Sentiment Index (SBRIN) and Sabrient Defensive Equity Index (SBRDE), respectively.
Here is a performance snapshot of each: Read more…
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The market strength has continued during this typically bullish time of the year, but Sabrient’s fundamentals-based SectorCast-ETF model has hardened its defensive posture. This would indicate that the rally has been driven more by things like sentiment and a weak dollar than by fundamentals. The Consumer Staples sector scored significantly lower this week, which allowed Utilities to move into second place. Notably, Consumer Discretionary has made a surprisingly strong move up this week.
Latest rankings: Other than the drop in Consumer Staples and the rise in Consumer Discretionary, there has been little change in scoring in this week’s rankings vs. last week’s. Read more…
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Stocks came strongly out of the gate last Monday to kick off the 2010 Wall Street race. And indeed the market advanced throughout the week, albeit fitfully, with the S&P 500 starting the week at 1114 and closing at 1144. So let’s recap last week’s market data for some insight on where we should be looking to invest now.
Large-cap Value took the early lead and was up 3.8 % for the week. The worst cap/style was, interestingly, Large-cap Growth, which was still up 1.8% for the week. Value did better than growth in each of the caps, primarily because of the Financial Sector’s continued rally. Part of the blame for the lagging growth stocks is due to sporadic but realistic talk about valuations of large-cap techs, such as Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG). There was also concern, though not as noisy, about valuations in various Materials and Energy stocks. Read more…
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