Northern Star Newsletter 4/27/2016
Our newest technical addition to the family... Lowry Research.
As many of you know, I am always in 'learning and growth' mode-always seeking out ways to improve and better the firm, myself and the services we offer our clientele. During a recent article on risk management, the research firm named Lowry was mentioned numerous times, which caused me to investigate them further. This was in part to ensure the legitimacy of the article and in part to see if there is better research to be found out there.
I learned that Lowry is the longest-standing research house on technical data in the US, with a history dating back 89 years. They have won numerous awards for the various research they offer professionals in the industry. Although their research is limited to ETF's and Stocks, they do have some proprietary tools and data that can be extrapolated and used for the betterment of our clientele, which has expanded to reach around the world.
What can Lowry do for us?
One of their many useful pieces of data is their buying power vs. selling pressure index. This measures the supply and demand for the NYSE. This index, coupled with a few other valuable charts, can aid us in offering our clientele the best investment advice and management strategies possible.
As you can see here, we are witnessing an important divergence unfolding between what is happening on the surface and the activity underneath. Selling pressure is rising as buying power is declining, suggesting that the strength of this rally is fading.
The buying pressure has shown a significant decline from March 18th to yesterday. Under a "normal" bull market rally we would expect to see it continue to climb. This is only one of the many data points that we here at Summit examine and use daily to ensure that the portfolio alignments and advice conveyed to our clientele is precisely refined to the market conditions.
Till we speak again, have a productive week!
Stocks End Mixed as Tech Falls on Earnings
WEEKLY UPDATE - APRIL 25, 2016
Stocks ended last week mixed on earnings that were largely better than expected, though the tech sector disappointed. For the week, the S&P 500 gained 0.52%, the Dow grew 0.59%, and the NASDAQ lost 0.65%.
First-quarter earnings reports drove a lot of market activity last week. Though analysts expect overall S&P 500 earnings to be negative for the fourth quarter in a row, the news so far is more about earnings surprises and fewer negative revisions to estimates. Given how low the bar was set by many corporate teams, it's not so unexpected to see positive surprises. With reports in from 132 S&P 500 members, overall earnings are down 7.9% on 1.1% lower revenues, though nearly three-quarters beat their earnings estimates.
However, the tech sector is another story. Tech stocks sold off after disappointing results from major players. Overall, much of the tech sector is painting a picture that is the inverse of the rest of the market - many companies are failing to rise to the expectations built over previous quarters of strong growth, disappointing investors.
Will investors hold on to their optimism in the days ahead? We'll see.
The week ahead is packed with important economic data, including the first estimate of first-quarter economic growth and a measure of consumer sentiment. The Federal Reserve Open Market Committee also meets next week to discuss interest rates; though no one expects the Fed to raise rates this month, analysts are hoping for more clarity on the timing of future hikes.
Last week, a Reuters poll of economists found that about two-thirds expect a June rate increase while another 20% are betting on September. In March, the Fed acknowledged its concerns about global risks, stating that it expects two more rate hikes this year, only half as many as were planned in December.
Earnings season also heats up next week with releases by 183 S&P 500 companies. By the end of the week, we'll have seen quarterly results from about 60% of the index and will have a much more complete picture of business activity last quarter. With all the reports coming out, we can expect some volatility in the days ahead as investors digest the latest data.
Monday: New Home Sales, Dallas Fed Mfg. Survey
Tuesday: Durable Goods Orders, S&P Case-Shiller HPI, Consumer Confidence
Wednesday: International Trade in Goods, Pending Home Sales Index, EIA Petroleum Status Report, FOMC Meeting Announcement
Thursday: GDP, Jobless Claims
Friday: Personal Income and Outlays, Employment Cost Index, Chicago PMI, Consumer Sentiment
Housing starts drop. Groundbreaking on new houses dropped 8.8% in March, and permits for new home construction fell, indicating that homebuilders are expecting the sector to cool off.
Existing home sales bounce 5.1% higher. Resales of existing homes rose more than expected in March, suggesting that the housing market had legs last quarter. Though monthly sales are volatile, growth was solid across all four U.S. regions.
Jobless claims drop to multi-decade low. The number of weekly applications for new unemployment benefits dropped to the lowest level since 1973 in the latest sign that the labor market is steaming ahead despite slow economic growth.
Oil prices post third week of gains. Benchmark crude oil prices rose again last week on expectations that the global oil supply glut is easing and demand will rise in the peak driving season.
Missed the Tax Deadline? Here's What to Do
April 18 was the tax filing deadline for most people in 2016. If you didn't file a tax return or an extension to file, it's not too late to take action. Here's what you can do:
File and pay soon. If you owe taxes, you should file and pay as soon as you can to minimize the interest and penalties that you will owe on any taxes due.
Pay as much as you can. If you owe taxes but can't pay in full, you should pay as much as you can when you file your tax return.
Remember your refund. If you are owed a refund, you should file as soon as possible to get it. If you don't file your return within three years, you could lose your right to the refund.
For more information on filing late taxes, speak to a qualified tax professional.
Tip courtesy of IRS.gov
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
The S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.
The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
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