Eurozone finance ministers reached an agreement to extend Greece's financial rescue by four months. Dutch finance minister Jeroen Dijsselbloem, head of the Eurogroup, said that Athens had pledged to honour all its debts.” Story at…
http://www.bbc.com/news/business-31556754
GARY SHILLING: WHY YOU SHOULD OWN BONDS (Advisor perspectives)
“Shilling still recommends the long-dates U.S. Treasury bonds. Forecasts by economists have been for rising rates, he said, going back as far as 1981. But those forecasts have been consistently wrong. “I think the 10-year is going to 1%,” he said, “not 2.9% as economists forecast.” That would result in a 12% return over a one-year horizon. It’s not just because U.S. Treasury bonds are safe haven, he said, but also because their spread is high relative to all other sovereign bonds. The yields on European sovereigns are too low, according to Shilling, and will get arbitraged away by declining U.S. rates… According to Shilling, equity positions should be concentrated in defensive stocks: utilities, health care and consumer staples – all of which beat S&P 500 last year…Shilling said investors should prepare for a risk of a “shock” that could result in a worldwide recession and a bear market. The most likely candidate, he said, is a fallout from low energy prices. That would change his investing outlook from “risk on” to “risk off.” But the only change to his investment recommendation would be to avoid all stocks.” Story at…
http://www.advisorperspectives.com/newsletters15/8-ownbonds4.php
OIL BOTTOM NOT YET (CNBC)
U.S. Energy Information Administration data…showed inventories rose by 7.7 million barrels last week—half of what the American Petroleum Institute had originally indicated. Citi's Ed Morse, a former deputy assistant secretary of state for international energy policy, told CNBC earlier this month the likelihood was "very great" that oil drops to a range in the $30s. "The world is oversupplied with oil, and we haven't seen the worst of it yet." Story at…
http://www.cnbc.com/id/102441915
MARKET REPORT
-Friday, the S&P 500 was up 0.61% to 2110 (rounded).
-VIX fell about 7% to 14.27.
-The yield on the 10-year Treasury Note was unchanged at 2.12%.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dipped to 53% at the close Friday. (A number above 50% is usually GOOD news for the markets.) New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +150. (It was +125 Tghursday). The 10-day moving average of change in the spread was +3. In other words, over the last 10-days, on average, the spread has INCREASED by 3-each day.
Internals remained neutral on the market, because advancing volume has been falling recently.
Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late. They are most useful when they diverge from the Index. In 2013, using these internals alone would have made a 16% return vs. 30% for the S&P 500 (in on Positive out on Negative – no shorting). Of course, few trend-following systems will do well in an extreme low-volatility, straight-up year like 2013.
NTSM
Friday, the NTSM analysis remained HOLD. The PRICE indicator is positive; VIX, VOLUME and SENTIMENT indicators are neutral, although sentiment remains extremely high.
I remain fully invested at 50% invested in stocks in the long-term portfolio. 50% is conservative, but appropriate for a retired guy.
My position in the S&P 500 is very small now. I have invested in the Dow Jones US Completion Total (^DWCPF) instead, because that is the only small-cap choice in my retirement account. (The DWCPF includes all stocks EXCEPT the S&P 500.) Some Pros disagree, but so far it has worked out. Since I made the call, at the end of January, the DWCPF is 1.7% ahead of the S&P 500.
