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There were four speeches today with Bernanke being the main act. In sum, his speech basically defended the monetary policies implemented during his tenure from the financial crisis until now. He stated economic conditions would be much worse had the Fed not acted with both ZIRP and QE.
Stocks rebounded from flat to mixed intraday action to move tentatively higher on the belief that Yellen will continue dovish and aggressive Fed policies which have supported the current bull market. Although stocks weren’t exactly encouraged today by declining auto sales as dealers are now stuffed with inventories. Industry analysts believe the previous existing auto fleet had aged and needed replacement but was postponed during the financial crisis. This is now a thing of the past as demand has been sated. Not mentioned, of course, are the auto purchases that are self-financed by the industry, as anyone with a pulse can “sign and drive.” (Of course, this is not the case with housing with now more difficult lender requirements.) Analysts’ note you’re starting to see more industry buyer incentives along with some inventory discounts.
Another negative on Friday comes from more disappointing economic data from China as the non-Mfg PMI declined for the fourth month in a row. Remember, all negative economic data from China makes a large impact across the globe, particularly with Emerging Markets. Both China and Emerging Markets continue in near bear markets while those markets with active central bank intervention (U.S. Eurozone, England, Japan and so forth) remain in bull markets. It’s unclear how long these divergences will remain.
The few equity sector ETFs leading markets higher included: REITs (IYR), Homebuilders (ITB, Financials (XLF), Small Caps (IWM), Healthcare (XLV), Brazil Small Caps (BRF), India (INP), Solar (TAN) and Gold (GLD). Declining sectors included: Crude Oil (USO), Gold Miners (GDX), Emerging Markets (EEM), Russia (RSX), China (FXI), Thailand (THD), Turkey (TUR), Singapore (EWS), Oil & Gas Exploration (XOP), and the Euro (FXE). The dollar (UUP) finished higher while bonds (TLT) were flat.
Today we featured a short video on iShares Emerging Market (EEM ) from both weekly and daily chart perspectives.
Our staff also puts together the daily top 20 ETF market movers by percentage change in volume for gainers, decliners and emerging volume.
Volume continues to be light due to those taking extended holidays and the winter storm in the U.S. northeast. Breadth per the WSJ was modestly positive.