Should Investors Stay Away From Marijuana Stocks?

From Investopedia:
NYSE:MJ April 18, 2019 5:54pm

3 big threats for the S&P 500 going forward

s&p 500
From Mark Kolakowski The S&P 500 Index (SPX) tumbled by 1.9% on Friday, March 22, for its biggest one-day percentage loss since Jan. 3.
On the previous day, the widely-followed market barometer registered its highest close since Oct. 9, 2018. Rather than a temporary bout of profit taking, this may represent the beginning of a longer-lasting reversal for stocks, in the opinion of several veteran market strategists.
"The Fed can't be dovish enough to support U.S. equity markets given the acceleration in the global growth slowdown and eventual U.S. slowdown," as Peter Cecchini, global chief market strategist at Cantor Fitzgerald, opined in a recent note to clients quoted by Business Insider. Meanwhile, massive outflows from equity mutual funds indicate that there is "simply no love for stocks," said Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, in a report also cited by BI.
Three big threats for stocks going forward are summarized in the table below. The S&P 500 was down fractionally on Monday, by just under 0.1%.
3 Threats That May Spur More Stock Declines
  • Net $20.7 billion redeemed from equity funds in the week ending March 21
  • Inverted yield curve in the U.S.
  • Yields on 10-year government bonds in Germany are now negative
Source: Business Insider

Significance For Investors

An inverted yield curve, in which short-term interest rates are higher than long-term rates, is historically a reliable predictor of an upcoming economic recession. In turn, the onset of a recession, or the anticipation of one, often triggers a bear market in stocks. On Friday, March 22, the U.S. yield curve inverted for the first time since 2007, which was the year in which the last U.S. recession and the last U.S. bear market began.
Leading fund managers across the globe surveyed by Bank of American Merrill Lynch now have their lowest allocation to stocks since Sept. 2016. Moreover, the net weekly outflow of $20.7 billion from equity funds happened before the March 22 plunge in the S&P 500. Whether this has spurred yet more withdrawals will be known when the next report by BofAML is released later this week.
As the largest economy in Europe, Germany is an important bellwether for the developed world. The yields on 10-year German government bonds turned negative for the first time since Oct. 2016, partly the result of declining exports to China, which is in the midst of its own economic slowdown. The impact is likely to extend to the U.S., as investors flee German bonds for U.S. Treasury securities, pushing their prices up and yields down, BI observes.

Looking Ahead

Despite these and other bearish developments, some market participants remain bullish. "We're very comfortable that the back three quarters of the year are going to show improvement over the first quarter," is the opinion of Philip Orlando, chief equity strategist at Federated Investors, in remarks on CNBC.
"I don't think we're going to retest the Christmas Eve bottoms," he asserted, adding, "We would use any weakness as a buying opportunity." He prefers large cap U.S. value stocks, as well as U.S. small cap stocks, and has a price target of 3,100 on the S&P 500, 10.8% above the March 25 close. His worst-case scenario is that the index slips to 2,600, or 7.1% below the March 25 close, if earnings are poor and corporate guidance is pessimistic.

The SPDR S&P 500 ETF Trust (SPY) was trading at $280.74 per share on Tuesday afternoon, up $1.70 (+0.61%). Year-to-date, SPY has gained 5.62%. SPY currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 154 ETFs in the Large Cap Blend ETFs category.
This article is brought to you courtesy of Investopedia.
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3 Silver ETFs to Keep an Eye On

long and stacked silver bars
From Timothy Smith:
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The bullish case for Silver in 2019

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From Alan Farley:
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Is there a short opportunity setting up in Emerging Markets?

From Tim Smith: After a bumper year of returns in 2017, emerging markets have copped a battering in 2018. 
NYSE:EEM November 9, 2018 1:10pm

Index Funds, Where Are We Now? (SPY, AFK, EFA)

portfolioStaying on top of up to the minute news like President Obama’s trip to the G-20 conference or Madonna’s pending adoption of a child from Malawi can distract investors from taking a breather to look back in time in order to get a better direction of where their investments may be headed in the future. Let’s take a look at how a couple of major indexes and index funds have performed since the beginning of the year to determine if your portfolio has the right balance of risk and return.

Focus

ETF

Year to Date

U.S. Dollar PowerShares DB US Dollar Index Bullish (NYSE:UUP)

2.7%

U.S. Equity SPDRS S&P 500 Index (NYSE:SPY)

-7.4%

Technology PowerShares QQQ (Nasdaq:QQQQ)

8.5%

Europe, Australia-Asia iShares MSCI EAFE Index (NYSE:EFA)

-11.5%

Energy United States Oil (NYSE:USO)

-8.7%

Precious Metals iShares Comex Gold Trust (NYSE:IAU)

-1.5%

Fixed Income iShares Barclays 7-10 Year Treasury (NYSE:IEF)

-4.0%

Frontier Markets Market Vectors Africa ETF (NYSE:AFK)

-3.2%

As of market close, April 6, 2009.
When will the correction begin? Everyone wants to know when the economic situation will improve, but the truth is no one knows for certain. The U.S. is ending its first full quarter with President Obama and his administration in office. The call to repair the ailing U.S. economy has been met with the passage of a stimulus package. Time and the ability of businesses to serve existing and push forward into new markets will help drive the eventual economic recovery.  The S&P 500 index, as tracked by the SPDRS S&P 500 Index (NYSE:SPY) fund, has continued to fall downward over the last year; however, this fund did start to rise in recent months as investors moved in to take advantage of low indexes in early March when the Dow Jones Industrial Average fell below 7,000 and the S&P500 went below 700. (For a complete guide, check out our Index Investing Tutorial.) Pullbacks and Producers Gold futures prices, followed by the iShares Comex Gold Trust (NYSE:IAU) fund, have continued to trade just under $900/oz. IAU hit as high as $91.44 on April 1, and since then has dropped about 6% to close April 6 at $85.37. The U.S. dollar index, followed by the PowerShares DB US Dollar Index Bullish (NYSE:UUP) fund, was also up for the year nearly 4% until April, but has seen a slight drop in the last three trading sessions. Investors have sought out these two investments as protectors against the uncertainty in the markets.  Technology has jumped since the beginning of the year as top PowerShares QQQQ (Nasdaq:QQQQ) fund holdings like Apple (Nasdaq:AAPL), Qualcomm (Nasdaq:QCOM) and Google (Nasdaq:GOOG) all continued to trade in positive territory through April 6. Frontier Markets It’s interesting to note the performance of Frontier markets covered by funds like Market Vectors Africa ETF (NYSE:AFK) in comparison to traditional international investments covered by the iShares MSCI EAFE Index (NYSE:EFA) fund. Frontier markets include areas like South Africa, Nigeria and Morocco. Government corruption, hyperinflation and human rights abuses are a part of the story for the emerging economies of the African continent, but it is not the entire picture. Investors with a high-risk tolerance and an extended time horizon may consider doing more research in this region. Final Thoughts The point of this index fund exercise is a reminder to investors to constantly focus on maintaining a diversified portfolio of investments. In addition, investors should also adopt an investment process for rebalancing their holdings by selling a percentage of winning investments and reinvesting those earnings in whatever you deem important or back into the other investments in your portfolio lagging others. (Find out whether these funds can really deliver low-risk returns, read Enhanced Index Funds - Shiny Paper Or Sparkling Gift?) Source:  By Gregory S. Davis   www.investopedia.com
ETF BASIC NEWS April 7, 2009 3:19pm

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