The major stock indexes pushed into record territory this week, led by gains in the Nasdaq and the Russell 2000. The Nasdaq is still below its all-time high, but it moved 0.6 percent closer as of Thursday. The S&P 500 Index was flat heading into Friday trading, while the DJIA was up about 0.4 percent. Additionally, the Japanese Nikkei Index climbed to a 15-year high on Thursday.

In contrast to the rising stock market, economic data was tepid this week. As expected, the Bureau of Economic Analysis revised fourth quarter GDP lower due to inventory and imports numbers. Growth was lowered from the initial 2.6 percent to 2.2 percent. The Consumer Price Index also came in as expected, down 0.7 percent from a year ago. The drop in oil prices was responsible for the slide into deflation as core CPI, which excludes food and energy, increased 0.2 percent. The Chicago PMI came in much lower than expected at 45.8 in February, down from 59.4 in January. It is the lowest reading on the index since July 2009. Durable goods from January were strong, up 2.8 percent and beat expectations. New home sales in January were well ahead of expectations and in line with the solid December number.

The U.S. dollar will finish the week on a strong note following a sharp drop in the euro on Thursday. The euro is not far from its lows for the year and with Germany approving Greece’s four month bailout extension, short-term pressures on the euro are lifted. Odds still favor a rally in the currency, but the primary trend in the euro is still bearish. A strong dollar has weighed on foreign markets and commodities. Case in point, oil prices followed the euro lower and sank below $50 a barrel on Thursday.

Earnings helped the market this week. Home Depot (HD) pleased investors with a rise in earnings, sales, a dividend increase and increased stock buybacks. The homebuilder sector remains a bright spot in this market as home sales remain near their post-2008 highs. The still hot solar sector lifted the Nasdaq following decent earnings from First Solar (FSLR) and SunPower (SPWR). The two firms sent their stocks sharply higher with a deal to spin off power generation projects into a new company, what the market dubs a yieldco. These types of deals are popular in the market right now because investors are hungry for yield and solar firms need capital to invest. Whether it turns out to be a good deal for yieldco shareholders remains to be seen, but the solar firms will benefit. The capital generated from the spinoff will be used on new projects.

For the week, the best performing sectors were consumer cyclicals, healthcare, consumer staples and technology, which were all up heading into Friday trading. Energy, utilities, industrials and materials were all down and are unlikely to turn positive without a significant rally on Friday. Financials were flat for the week, but opened lower on Friday.

Bonds were up on the week as interest rates declined. Janet Yellen’s testimony before Congress confirmed what the Fed minutes seemed to indicate: a rate increase will come later than the market had been expecting. Yellen was optimistic on the economy though and expects that labor market improvements will lift inflation into the Fed’s target range over the next two years.

SPDR Energy (XLE)
United States Natural Gas (UNG)
First Trust ISE Revere Natural Gas (FCG)
Market Vectors Russia (RSX)

Oil prices may be stabilizing as demand rises and inventories increases. Today, Saudi Arabia’s oil minister said demand is recovering, signaling the drop in prices may be over. On the other side, rising crude inventories in the United States, now at all-time highs, indicate prices may struggle to rally in the immediate future.

Energy stocks were flat on the week as oil slipped. Short-term traders betting on a rebound may be taking profits as well. Natural gas prices have come up, but natural gas producers continue to trade in line with the oil sector.
The Russian rally also paused last week, while Nigeria may have hit bottom.

PowerShares U.S. Dollar Index Bullish Fund (UUP)
CurrencyShares Euro Trust (FXE)
Global X FTSE Greece 20 (GREK)

Europe can breathe a sigh of relief for another four months after a bailout extension for Greece was approved. European equities have rallied in response, but the currency market did not. At this point, a U.S. dollar correction is still possible, but far less likely. The sideways move in the greenback (and the euro) has moved the short-term technical indicators back towards normal. Without a catalyst to push the euro higher, the bull market in the dollar will likely reassert itself.

SPDR Utilities (XLU)
SPDR Pharmaceuticals (XPH)
SPDR Healthcare (XLV)
SPDR Technology (XLK)
SPDR Financials (XLF)
iShares US Home Construction (ITB)

As noted above, the energy sector has retreated after a strong multi-week rebound. The sector performance chart below shows XLE trailed the S&P 500 Index by 1.83 percent last week. It was a positive week for the market overall though, which is why utilities and consumer staples also trailed the broader market. Financials were hurt by Fed meeting minutes which showed officials are not interested in hiking rates too soon, plus Janet Yellen’s comments that signaled rate hikes will come later rather than sooner. Healthcare was helped by a jump in pharmaceuticals and biotechnology.

Homebuilder ETFs rallied too, helped by strong fourth quarter earnings from Home Depot (HD). Sales came in ahead of expectations and earnings were up more than 40 percent from year-ago levels. The company also announced plans to repurchase $18 billion worth of shares and upped the dividend by 26 percent.

SPDR S&P 500 (SPY)
iShares Russell 2000 (IWM)
S&P Midcap 400 (MDY)
PowerShares QQQ (QQQ)

Small and mid-caps are still keeping pace with large caps as the major indexes push on to new all-time highs.

The Nasdaq is below its all-time high, but not by much. One good day would be enough to push the index up 1.5 percent to a new all-time closing high, while a gain of a little more than 3 percent will send the index to an all-time intraday record. Among the sectors propelling the Nasdaq is semiconductors, which has broken out to a new 52-week high.

Marsico Growth Stuck In Neutral

A Seeking Alpha Contribution

Established in late December 1997, the Marsico Growth Fund (MUTF:MGRIX) seeks capital appreciation by investing primarily in large-cap domestic or foreign companies that demonstrate potential for long-term growth. The fund normally holds between 35 and 50 individual issues. The selected stocks may have economic ties to emerging and developed markets around the globe. The fund sells shares when fundamentals change or price appreciation leads to an overvaluation in relationship to future potential earnings and cash flow growth. This large-cap growth fund has a three-star rating from Morningstar… To Continue Reading Please, Click Here.

With earnings season mostly in the rear view mirror, investors will focus on macroeconomic conditions this week. On Friday, the Bureau of Economic Analysis will release the second estimate of fourth quarter GDP. The number is expected to be 2.1 percent, down from the initial 2.6 percent estimate due to stronger than expected exports and weaker than forecasted inventory growth.

More important for the market is a slew of January data that will tells us how the first quarter of 2015 is going. Durable goods orders and capital goods orders for January are both out this week, as is the January consumer price index. The consensus is expecting a 0.6 percent drop in inflation year on year, but a lower number is likely. The Billion Price Project (BPP) at MIT shows inflation fell more than 1 percent year on year during January. The BPP is a real-time look at prices and tends to be a very good predictor of government numbers. Later in the week, the flash PMI for China will be out. Oil, copper and other commodities have been weak, likely due to a sudden drop in Chinese demand as factories close their doors and real estate investment starts to contract.

Oil prices opened lower on Monday, with West Texas Intermediate Crude down about $2 and again below $50 a barrel. Inventories have been growing rapidly, signaling demand for oil has slowed in recent weeks. It’s unclear as of yet where the slowdown is coming from, but with inventories at record highs in the U.S. and oil production still rising, the price of oil in the futures markets is starting to slowly drop. Look for oil to trade in a tight range this week, with a bias toward the downside.

Assuming no surprises emerge, it appears Greece and its creditors have come to an agreement. Later today, a list of reforms will be submitted by Greece and if accepted, the deal will go forward. Equity investors seem optimistic, but currency traders sent the euro lower in early trading. The euro should bounce after tumbling from $1.24 to $1.11 from December into January, and a failure to bounce would signal that this bear market is a major one. The flip side of a euro bear market is a U.S. dollar bull market.

Earnings are light this week, though there are a few big names reporting. Petrobras (PBR), the Brazilian oil giant reports. The company comprises about 20 percent of iShares MSCI Brazil (EWZ) and will have a significant impact on the ETF’s performance. The firm has been hit by a corruption scandal and plunging oil prices, weighing on the ETF. Home Depot (HD) and Lowe’s (LOW), both components in homebuilder ETFs, report as well. SunPower (SPWR) and First Solar (FSLR) will be interesting to watch as the solar sector has been outperforming over the past month. Other companies scheduled to announce earnings include Chesapeake Energy (CHK), Hewlett-Packard (HPQ), Target (TGT), J.C. Penney (JCP) and 3D Systems (DDD).

Wintergreen Takes An Evergreen Approach To Stock Selection

A Seeking Alpha Contribution

Established in 2005, the two-star Morningstar rated Wintergreen Investor Fund (MUTF:WGRNX) is a world stock category fund that seeks capital appreciation. The fund invests in stocks or convertible securities that manager David Winters believes are available at a discount to their intrinsic value. The fund invests in domestic and foreign issues of any size, including those from emerging markets.

Investment Strategy

Investment manager David Winters identifies securities through extensive analysis that includes book value, cash flow and earnings multiples. The goal is to select stocks that constitute what the fund manager calls a “trifecta.” These are stocks with good value issued by companies with shareholder-oriented management that are demonstrating improved business operations. The portfolio typically holds around 30 individual positions for the long-term while attempting to minimize turnover. This strategy often leads to owning shares in cash-rich companies that pay dividends or buy back shares. Shares are sold when valuation targets are met. The fund typically maintains 10 percent cash in order to capitalize on opportunities as they occur. WGRNX may invest in arbitrage opportunities that result from mergers, acquisitions, spin offs and consolidations as well as tender offers and liquidations. In addition to arbitrage opportunities, the fund may also take an activist role if the team anticipates that this position will benefit the investment. To minimize risk, the manager may engage in hedging strategies, such as owning gold and foreign currency swaps, purchasing put or call options and shorting stocks….To Continue Reading Please, Click Here.