$SPY, $STUDY, Friday’s strong non-farm payroll and pickup in wages
bolstered chances for an interest rate hike at the October FOMC meeting and
stocks traded mixed on the report. Despite a 14% jump in 10-year Treasury
yields this week, stocks held up pretty well. Traders seem to be open to the
fact that rates will be rising and next week will shift their focus back to
Greece and the U.S. dollar. Although the Greek economy has little to do with a
global economic recovery, failure to repay its debt to the International
Monetary Fund will temporarily hit the Euro and cause the U.S. dollar to surge.
That would cut into third and fourth quarter earnings and could have a negative
effect on GDP for the remainder of the year.
While the overall Alpha Model Portfolio’s performed well over the
past week the Major Market Model did weaken somewhat. While the Asset Allocation recommendation
remained at 50% Long and 50% Cash the Buy/Sell calls went to 75% Buy and the
Opinion shifted to 3 Neutral and 1 Bullish down from a 50/50 split over the
past several weeks. The underlying lists
weakened somewhat also with the Long calls dropping to 46% of total from 49%
the prior week.
We sold UA on June 1st and replaced the position with
IDTI which added to the overall gain for the week.
Personally I am just not getting overly Bullish at this time,
there are a few names on the Watch List which I find interesting, particularly AVAGO TECHNOLOGIES (AVGO) and STARBUCKS CORP (SBUX). But it will take a little bit of positive
news before I commit to a new position.
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