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Posted by on Feb 19, 2016 in Laif Meidell, Market Insight

Markets Mostly Static As Gains Consolidated

Markets Mostly Static As Gains Consolidated

By Laif Meidell, CMT, President of American Wealth Management, and Portfolio Manager of the AdvisorShares Meidell Tactical Advantage ETF (NYSE Arca: MATH) and the AdvisorShares Market Adaptive Unconstrained Income ETF (NASDAQ: MAUI)

Stocks retreated slightly on Thursday as they consolidated their gains over the past three days. The major market averages finished toward the lower side of the day’s trading range with the Standard and Poor’s 500 down 0.47 percent and the Nasdaq Composite off 1.03 percent.

Of note was the resiliency of the S&P 600 (small company) index which finished lower by a mere 0.19 percent on Thursday. The behavior of small company stocks tends to be a window into investors’ attitudes about risk, so small company outperformance on a down day like Thursday has historically been a favorable sign for the bulls over the coming days.

Some time you have to work at it to find the silver lining in life and the same goes for the oil market. Investors cheered by lifting the price of oil following news that Iran publicly welcomed the initiative to freeze oil output from the world’s largest producers, namely Russia and Saudi Arabia.

Bijan Zanganeh, Iran’s oil minister, said he welcomed and supported cooperation between OPEC and non-OPEC members. He went on to say, “Iran backs any measures which help stabilize the market and improve the price of crude oil.”

The surprising twist to the story was that Iran did not offer to join the initiative. Iran has been seen as a wild card by those who support a combined effort to cut oil production, in order to stabilize and lift oil prices. Oil ultimately retreated during the day after the EIA petroleum status report showed a further buildup of oil inventories by 2.1 million barrels for the week.

Thanks to the recent advance in oil and stock prices lower quality bonds have been getting a lift as well. This week’s top performing bonds are led by the Barclay’s U.S. Convertible Bond index up 2.91 percent over the past five trading days, followed by the Barclays High Yield Very Liquid index gaining 1.92 percent over the same period.

This commentary originally published in the Reno Gazette-Journal. Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.