US Corporate Bond Sales at Record

US Corporate Bond sales came in at $427 billion during the first quarter, easily beating the prior record of $397 billion set last year. Before the recent sell-off in corporate bonds the yield was at 3.4% for investment-grade, the lowest number since 1986, when the recording started.

Corporations are taking advantage of the low interest rates and borrowing money for expansion, etc. I will give the Fed credit in that by keeping interest rates low it allows for corporations to borrow at low rates, a big plus for stock performance.

The iShares Corporate Bond ETF ($LQD) is up 2% in 2012 and yields 4.24%.

The SPDR High Yield Corporate Bond ETF ($JNK) is up 3% and yields 7.28%.

VERSUS

The iShares 20+ Year Treasury Bond ETF ($TLT) that is down 6% and only yields 3.37%.

Hmmmm Corporations versus governments? I will go with LQD and JNK all day!!

Obamacare Trial - Good for Insurers

Talking heads like myself can debate til the sun comes up if Obamacare is good or bad for health care insurers. The bottom line is that the price of the shares will provide us with the correct answer.

After the three days of hearings in front of the Supreme Court the consensus is that insurers may not be forced to insure everyone and that would be a boost to the industry.

Stocks on the move include Aetna ($AET), Coventry Health Care ($CVH), Cigna ($CI), UniteHealth ($UNH), Humana ($HUM), and Wellpoint ($WLP).

ETFs to Watch: iShares Health Care Providers ($IHF)

Big Week for IPOs

Today 4 IPOs began trading, one day after 3 new issues entered the market.

Here are today's IPOs:

• CafePress ($PRSS) - Owns e-commerce sites where customers create, buy, and sell personalized products. Priced at $19.

• Millenial Media ($MM) - The 2nd largest mobile advertising platform in the US. Priced at $13.

• Rexnord ($RXN) - Manufactures gears, bearings, and water management products. Priced at $18.

• Merrimack Pharmaceuticals ($MACK) - Uses a network biology system to develop cancer treatments. Priced at $7.
  

China Growth Estimates Boosted

This morning Morgan Stanley upped its 2012 global growth estimates and it was fueled by a revision in China's numbers.

The firm now believes the 2012 global GDP will come in at 3.7% versus 3.5%.

China's GDP estimate is now 9.0% versus the 8.4% it had in recent months. One of the main factors behind the move is anticipated stimulus from China's government to help boost growth.

Japan's GDP was also increased to 1.8% versus 1.1%.

ETFs to Watch: iShares China ETF ($FXI), iShares Japan ETF ($EWJ), Vanguard Total World ETF ($VT)

On Fox News Thursday and Friday

Matt McCall will be on Fox News Channel on Thursday at 2pm ET and Friday at 1:15pm ET with host Megyn Kelly.

Thursday will be all about subsidies for big oil companies. Will the President get his wish and remove the billions in subsidies or will it be blocked in fear of higher oil prices?

Make sure to tune in for the riveting debate.

Recent IPOs Continue to Surge

Today Annie’s ($BNNY) began trading on the NASDAQ and was welcomed with a wave of buying. The maker of organic food priced its IPO at $19 per share, above its revised target of $16 to $18. The stock quickly surged to a high of $36.52 before finishing the session at $35.92, up 89% of the IPO price.

Another recent IPO, Yelp ($YELP) closed higher by 1.6%, but was much higher during intraday trading. Brightcove ($BCOV) and Demandware ($DWRE) also closed at their best levels ever after debuting in the last two months. Even internet company, Angie’s List ($ANGI) was able to rally over 5% to close at its best level since it began trading in December of last year.

ETF to Watch: First Trust IPOX 100 Index ETF ($FPX).

4 Stocks Looking Good on the Charts

OYO Geospace Corporation (NASDAQ: OYOG) manufactures instruments that are used in the process of acquiring seismic data. This process can be used in the monitoring and execution of oil and gas wells. The company is also involved in niche sectors such as marine cable, earthquake detection, and textile markets

Berry Petroleum Company (NYSE: BRY) is an independent oil and natural gas company that has the majority of its wells west of Colorado. Fundamentally the stock caught my eye with a PEG ratio of 0.34, making it more attractive than many of its peers.


Kennametal (NYSE: KMT) supplies tooling and engineering products for the production process to companies worldwide in a number of different industries. The products are use in everything from mining for metals to agriculture to the defense sector.


Royal Gold (NASDAQ: RGLD) is not your typical gold stock; instead of owning the mines and being involved in the extraction process, RGLD owns royalty interests in various mining projects around the globe.

Buy These ETFs During A Pullback

Link to the article:

Buy These ETFs During A Pullback

Value Stocks Beat Growth Stocks

According to a chart from Bespoke Investment Group, the S&P 500 Value stocks continue to outperform the broad average as well as the Growth index. This is quite surprise considering the move to the risk-on trade typically has money flowing into the riskiest assets such as growth stocks.

To me this is very telling that the search for high quality, attractive valuation, and high dividend stocks remains at the top of investors lists.

Stocks for the Hunger Games Rally

The Hunger Games debuted to great success this weekend and it appears the series of books will continue to be a household name for the next few years. A number of stocks attribute a large portion of their recent success to the Hunger Games anticipation and the movie did not disappoint.

Lions Gate Entertainment ($LGF) - The film company looks to have its first blockbuster franchise with Hunger Games. Based on the opening weekend $LGF will have two more big winners in the future.

Mattel ($MAT) - Releasing a "Hunger Games" Barbie will only add to the stock that is trading at an all-time high. Merchandise for an ongoing blockbuster series can pay huge for $MAT owners.

Scholastic ($SCHL) - The publisher of the Hunger Games books will continue to see increased buying as the popularity of the series spreads.

Carmike Cinemas ($CKEC) & Regal Entertainment ($RGC) - Two movie theater companies that will see increased attendance due to the success of the Hunger Games movies.

Four Stocks Predict Economy

The number of stocks hitting new 52-week highs has been increasing with the overall market near multi-year highs. This is not surprising, however the names of the stocks hitting highs has been intriguing to me. The plethora of names suggest there is real strength in the underlying economy and that the rally should continue into the second half of 2012.

Sherwin-Williams ($SHW) - The building materials company best known for its paint supplies is hitting new highs as the housing market continues to struggle to gain footing. $SHW is showing us that the housing market may be closer to a bottom than many expect.

The Walt Disney Company ($DIS) - Theme parks, movies, and cable advertising are the name of the game for $DIS. If that is working it must be saying something about the economy.

Starbucks ($SBUX) - My bill this morning was over $10 for a lattle, bottle of OJ, and egg sandwich. And more importantly the line was 7 people deep. Again, if the economy was still struggling would we be waiting in line for $5 lattes?

Qualcomm ($QCOM) - The maker of chips for wireless devices relies on demand from consumers worldwide. Demand for new, innovative products must be pretty darn good, another positive signal.

ETF of the Day - Health Care ETF XLV

As Obamacare gets to make its way to the Supreme Court the health care stocks are not blinking an eye on they way to new highs. The SPDR Health Care ETF ($XLV) is up another 1.4% this morning and is now trading at a 5-year high.

The ETF is composed of pharmaceuticals (50%), health care providers (19%), medical equipment (16%), biotech (11%), life sciences (4%). The top 4 stocks are all drug companies ($JNJ, $PFE, $MRK, $ABT) that have been doing very well in both a risk-on and risk-off market environment.

The eventual ruling on whether Obamacare is constitutional will likely have some impact on the ETF, but any decision will have its pros and cons on the sector. What I like about $XLV is the exposure to pharmaceuticals, which are poised to continue moving higher, as well as the 2% dividend yield. Throw in the bullish chart and $XLV looks like a winner.

Market Recap - Iron Ore Scare, Cotton at Lows, Oracle

The major stock indices opened the session well into negative territory after remarks from mining giant BHP Billiton ($BHP) about flattening Chinese growth. This led to declines in Asia and Europe and that spilled over to the US as investors backed away from the “risk on” trade.

The question I ask myself is flat demand for iron ore by the Chinese really that bad? It is not as if BHP came out and said demand was decreasing dramatically or that it was the end of the iron ore bull market. The simply said demand is flattening, that tells me it will be the same as last year, which was a good number. This is a story to keep an eye on.

The Market Vectors Steel ETF ($SLX) was down 2.1% after rallying the last five sessions.

Cotton Near 2-Year Low

The price of cotton continues to fall and is now near a 2-year low as the US government estimates that stockpiles will expand by 32% after record crops in several key countries. The bad news is that the iPath Cotton ETN ($BAL) is down over 50% from the 2011 high. The good news is that the cost for some retailers and apparel makers will fall with the price of cotton.

Oracle Beats Earnings

After the bell major software play, Oracle ($ORCL), beat earnings and the stock is rallying 2.8%, adding to its 1.1% gain it had during the normal trading hours. Within technology one of my favorite sectors is software based on the concept the companies can help lower costs and increase production as well as the ties to the cloud computing craze. The iShares Software ETF ($IGV) lost 0.9% today, but is up 20% year-to-date.

ETF of the Day - First Trust IPOX 100 ETF

First Trust IPOX 100 Index ETF ($FPX)

The name can be a little deceiving because it suggests it invests in 100 recent IPOs. The ETF does just that, but investors must realize that the stocks can trade for up to 1000 days after they become public to be considered for the ETF. The biggest holdings as of today are Visa ($V), Philip Morris International ($PM), General Motors ($GM), and Kinder Morgan ($KMI).

As far as sectors, IT makes up 25%, consumer discretionary 23%, consumer staples 18%, and energy 14%. Investors hoping to get a large exposure to the more recent IPOs and cloud computing will be disappointed. That being said, the ETF hit a new all-time high last week and the top 10 stocks are impressive. The net expense ratio on the ETF is 0.60%.

Mid-Day Update: Stocks Down, Banks Up, Retail Sales

Heading into the lunchtime hour on the East Coast the major stock indices are in the red after news out of China last night had international markets on the defensive. The Dow is down 74 points or 0.55%, S&P 500 is off 8 points or 0.6%, and the NASDAQ is losing 23 points of 0.75%.

The SPDR Financial Sector ETF ($XLF) is up again today with a gain of 0.1%; another close in the green will be the sixth straight winning session for the ETF that is trading at its best level since last May. Leading the way is Goldman Sachs ($GS), Bank of America ($BAC), and Morgan Stanley ($MS). As I mentioned yesterday, the rally in the financials is getting long in the tooth, but stocks can remains overbought for long periods of time so it is tough to fight the tape.

The Redbook Chain Store sales for the week rose 3.6% versus 3.3% last week. The ICSC Retail Store sales rose 0.9% week over week versus 0.7% last week and are up 3.3% versus last year, better than the 2.3% yearly gain reported last week. Once again showing the resilience of the consumer.

The SPDR Retail ETF ($XRT) is up 0.1% today on the news and is trading just below an all-time high.

Financials Continue to Surge (Time to Sell?)

The SPDR Financial ETF ($XLF) gained 0.5% today to close at the best level since last May even though a late day sell-off in Bank of America ($BAC) weighed on the sector. Rumors that $BAC was going to issue shares sent the stock lower by 2.8%, however after the company refuted the news after the closing bell the stock rallied over 1%.

I did get a questionable feeling today as I watched $BAC go from positive to negative and the other financials closed off the highs of the day. I have a couple financial positions that have gains after the big rally since December and the question is whether to sell now and lock-in the gains or let them ride?

I have not made that decision as of tonight. As much as I do not want to sell, my gut and the charts tell me a pullback in the sector is overdue. That being said, trying to time a high to sell and rebuying on a pullback is one of the more difficult investment strategies to pull off. The next 24-72 hours will be spent analyzing more of the charts and recent market action to make a decision.

Playing Oil Spike With Equipment Stocks

My article on how to play soaring oil prices.

Playing Oil Spike With Equipment Stocks

Market Recap - Get Ready for More Selling

The gauge I received from investors yesterday and today varied greatly. Yesterday the euphoria of getting 100% into aggressive stocks was the mood. Today it was as if they just cancelled Christmas - investors suddenly started to question the rally and are not nervous in regards to have far the market has gone this year.

It should not be surprising to me to see such a dramatic change in the way investors view the market from day to day. But it still amazes me to this day that the investors that change their view from day to day are long-term (and often conservative) investors. That is they are investing for retirement that is at least 10 years away and will not touch the money for at least that long. So tell me, why would you base investment decisions off the day to day moves of the market?

You should not and that is why the majority of individual investors struggle to not only keep up with the S&P 500, but to make any money investing.

Looking ahead, I feel that the market is ahead of itself in the very short-term and a few days of selling is completely normal. That being said, I am not changing my investment strategy. I continue to believe 1500 to 1550 is the target for the S&P 500 in the coming months and I invest accordingly. That would have me buying on dips and looking for opportunities during market weakness.

The bottom line is that today you should not panic because the market did not follow through on the big gains yesterday. You should be preparing your WishList of stocks and ETFs for the next pullback.

Be Proactive NOT Reactive.

Gas Prices Become Troublesome - Make Money From It

The chart shows the price of gas during the week of March 12 and as you can see this year it is higher than it has been the last 17 years. There are several comparisons we can make to determine if the price of gasoline is affecting the economy and the consumer. But this chart tells the story because it compares the same week every year. Wait until the summer driving season is here and get ready for $4 is not much higher gasoline.

Then there are the outside factors such as Iran that could catapult gasoline higher. But a bigger concern should be an increase in demand. If the economy continues to improve, demand will increase and therefore so will the price. That is until it gets to an unsustainable price!!

Investors can look to stocks and ETFs to play higher gas prices. The most direct play is the US Gasoline ETF ($UGA) that tracks the front month gasoline futures. The ETF is trading at its best level in over three years and could see higher prices with the current environment setup for the trend to continue.

On Hannity Tonight at 9:45 ET on Fox News Channel

Tune in tonight at 9:45 ET to watch Matt McCall on "Hannity's" Great American Panel on Fox News Channel.

Get ready for some great political and exciting debates between Matt and Sean.

Market Surges on Stress Tests

With an hour left in trading the news that JPMorgan Chase ($JPM) has passed the stress test and plans to hike its dividend and buy back shares sent the market soaring. Since that time we have found out all but 4 of the banks passed the stress tests. This sent the SPDR Financial ETF ($XLF) up 3.8% today to the best level since July 2011.

The news sent $JPM higher by 7% for the session. I am smiling as I type this as $JPM is one of the firms bigger positions. It is nice to see patience pay off and the gains begin to pile up. I expect this strength to carry over into tomorrow and could be enough to help the market continue its current bull market. The S&P 500 is now up 11% for the year.

With that being said, I do have a bit of caution for investors that are only now deciding it is time to get back into stocks. I do not want to say you are too late, but the reward-to-risk situation is not as attractive as it was three months ago. We have been doing some buying and selling since the year began to position for this rally. My prediction for the S&P 500 was in the 1500 to 1550 range for the mid-year high. Today the index closed at 1395, that leaves another 9% on the upside at the mid-range of the prediction.

The support for the index is about 5% below the current price and therefore the reward-to-risk is 9-to-5, not the ideal setup for getting back into the market. A pullback to the low to mid 1300's would be much more attractive for new money. We will continue to pick individual stocks/ETFs that offer better setups and could participate in a rally to 1550.

I will share one such ETF with you. The iShares Realty Majors Index ETF ($ICF) invests in a basket of REITs and broke out of a consolidation pattern today. There is strong support at the $74-$75 area and it closed today at $76.06. The dividend yield is 2.8%.

Random 52-Week Highs

The list of stocks/ETFs hitting new highs is growing as the major indices break out to multi-year highs. What I find interesting is that not only are the popular names breaking out, but so are some of the lesser-known stocks and ETFs. Here are a few that may surprise investors.

• PowerShares Emerging Markets Sovereign Debt ETF ($PCY) - The basket of emerging market debt has surged straight higher after bottoming in early January. Along with the ETF breakout out to new highs, it pays a 5.2% dividend.
• Target Corp ($TGT) - The discount retailer typically does well during slow growth environments and when the risk-on trade is off. However this time around the retailer is enjoying success as it hits a new high today.
• Brookfield Infrastructure Partners ($BIP) - The company owns and operates various infrastructure properties around the globe. They include shipping terminals, LNG production facilities, etc. With the global economy still not at high growth levels it may be surprising this company is doing so well. It also pays a 4.8% dividend.

** My firm owns shares for all three mentioned for some of our clients.

Mid-Day Update: Financials Rally, Retail Sales, Greenback

The S&P 500 is gaining nearly 1% as we approach the lunchtime hour on the east coast. The market is being led by the financial stocks as the risk-on trade is back.

Financials Rally

The SPDR Financial ETF ($XLF) is up 1.3% today to the best level since last August and is being led by big gains from Goldman Sachs (NYSE: GS), Morgan Stanley ($MS), and JPMorgan Chase ($JPM). The rally comes ahead of the release of the bank stress tests on Thursday. The speculation is that the results will allow the banks to increase their dividend payouts and buy back shares. Both scenarios will lead to more investors flocking to the sector and is why the buying has begun today.

Retail Sales

US Retail Sales biggest gain in five months with February up 1.1% versus 0.6% in January. Sales ex-autos came in at 0.9% versus expectations of 0.7%. It appears the consumer continues to chug along even as the overall view on the economy remains neutral at best. The SPDR Retail ETF ($XRT) is breaking out to a new all-time high on the news.

Greenback Rallies

The U.S. Dollar Index hit the best level in nearly two months as investors view the currency as the best of the best. The Euro continues to hit headwinds due to the sovereign debt issues, the Yen is falling with the BOJ decision, and the U.S. appears to have the best economy of the developed nations. The PowerShares US Dollar Index Bullish ETF ($UUP) was last up 0.2%.