While the market declined modestly on the week, the outlook continues to be positive. Earnings were generally favorable, with Apple (AAPL), Visa (V), Amazon (AMZN) and Boeing (BA) delivering strong reports. Apple reported the largest single quarter profit of any public company in history. Additionally, Visa announced a 4-for-1 stock split after beating revenue and earnings estimates. Caterpillar (CAT) missed, but that was not surprising since the slowdown in China and tumbling resource prices have curbed demand for its products.

According to Factset Research, as of last Friday, 79 percent of companies have beaten their earnings estimates and more than half have beaten sales estimates. Earnings growth was only 0.25 percent though, hurt by lower energy prices. Aside from the energy hit, one theme in the market this week was the stronger U.S. dollar’s impact on multinational earnings. Several firms lowered guidance due to the impact of weaker foreign currencies. In most cases, these reductions were small and already factored into estimates for 2015, so the impact on stocks was muted.

We’ve been talking about the stronger U.S. dollar for months and positioned for it using funds that hedge currency exposure such as Vanguard Global Minimum Volatility (VMVFX) and WisdomTree Europe Hedged Equity (HEDJ). Although the euro did rebound against the U.S. dollar this week, the dollar bull rally continues in other currencies. The Singapore dollar tumbled and Denmark cut interest rates to negative 0.5 percent to defend its euro peg. Even more, the offshore Chinese yuan (traded in Hong Kong), Russian ruble, Mexican peso and Brazilian real all slid sharply versus the U.S. dollar.

While investors were focused on multinationals cutting their earnings estimates by a few pennies this week, attention will soon turn to the $9 trillion in U.S. dollar denominated debt held in non-dollar countries. Much of that debt has been borrowed by emerging market companies such as real estate developers in China. Ignoring any new borrowing, the value of this debt is rising sharply for overseas borrowers due to the U.S. dollar rally. In the past, this situation has led to banking crises, but much of this debt was borrowed from bond investors after 2008. In short, the U.S. dollar and interest rates on dollar debt could rise even faster in 2015 if these borrowers begin to default.

Moving beyond private debt, Greece is making waves in Europe as its new government demands to renegotiate the bailout, saying more loans won’t solve anything since the country can’t repay the existing debt. No matter what Europe decides to do, the situation will not be contained to Greece because it will set a precedent. If the Greeks get a better deal, Spanish voters will take note when they head to the polls later this year.

On Friday, the Bureau of Economic Analysis released the first estimate of fourth quarter GDP growth. It fell a little short of estimates, coming in at 2.6 percent versus estimates of around 3.2 percent, due in part to higher imports. Imports tend to rise when the dollar strengthens and this will likely be a headwind for headline GDP going forward. GDP growth for the full year in 2014 was 2.4 percent (based on this first estimate of Q4 growth), which is up from 2012 and 2013. The second estimate of 2014 Q4 GDP comes out in late February.

The Best Gold Fund To Own

A Seeking Alpha Contribution

Investors have flocked to index funds and ETFs due to their low cost, tax efficiency and transparency. The general rise of indexing has helped ETFs grow rapidly, taking market share from mutual funds, particularly actively managed funds. However, there are clear-cut cases of active managers outperforming their indexed competition. One example is the gold mining sector.

Gold Funds

Since the inception of the Market Vectors Gold Miners ETF (NYSEARCA:GDX) in 2006, the fund has seen an incredible inflow of funds, to $7.1 billion as of January 23. The small cap edition, Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) has amassed $2 billion in assets since its inception in late 2009. The actively managed the Tocqueville Gold Fund No Load (MUTF:TGLDX), which was created back in 1998, has attracted only $1.3 billion in assets… continue reading.

*Please note, this article was written and published as a contribution for Seeking Alpha. To finish reading the article you will be redirected to their site.

Best High-Yield Bond Funds For 2015 – Part 3

A Seeking Alpha Contribution

In part one, we compared the two largest high-yield bond funds: iShares iBoxx $ High Yield Corporate Bond (NYSEARCA:HYG) and SPDR Barclays Capital High Yield Bond (NYSEARCA:JNK).

In part two, we compared two short-term high-yield bond funds: PIMCO 0-5 Year High Yield Corporate Bond (NYSEARCA:HYS) and SPDR Barclays Short Term High Yield Bond (NYSEARCA:SJNK).

In part three, we will look at the offerings in the high-yield municipal bond space: SPDR Nuveen S&P High Yield Municipal Bond (NYSEARCA:HYMB), Market Vectors High-Yield Municipal Index (NYSEARCA:HYD) and the much newer Market Vectors Short High-Yield Municipal Index (NYSEARCA:SHYD)…. To Continue Reading Please, Click Here.

*Please note, this article was written and published as a contribution for Seeking Alpha. To finish reading the article you will be redirected to their site.

Greece elected the anti-austerity Syriza party on Sunday and immediately found a coalition partner in the right-wing Independent Greeks party, which also opposes austerity. This could generate volatility for the markets in the days and weeks ahead, but the immediate result of the election was the covering of short positions. The euro rebounded versus the U.S. dollar on Monday and European shares traded higher, although Greek shares did decline.

Beyond the currency markets, there were rebounds in copper, oil and other commodities. High-yield bonds, currencies and emerging markets, along with commodities, have been in downtrends stretching back to the summer of 2014 in many cases. Emerging markets have rebounded in 2015, and commodities, foreign currencies and high-yield debt are all overdue for a bounce. The U.S. dollar is also long overdue for a pullback. Markets such as oil and the euro remain in clear bear markets though, so a rebound may not last long.

If the euro and European politics takes a back seat for a while, investors may finally turn back to the U.S. market and earnings season. Apple (AAPL), Facebook (FB), Amazon (AMZN), Microsoft (MSFT), Yahoo (YHOO), Google (GOOG), Boeing (BA), Chevron (CVX), Ford (F), Pfizer (PFE), Proctor & Gamble (PG), Alibaba (BABA), Visa (V), Mastercard (MA) and AT&T (T) report over this big week. Technology, pharmaceutical and financial services funds will be most affected by the results. Growth funds will also be impacted; for example, five of the above companies are top positions found in Fidelity Blue Chip Growth (FBGRX).

The Federal Reserve meets this week and will make a policy statement on Wednesday. The Fed isn’t expected to hike rates until June, so no change is expected. The minutes from the meeting will be interesting to read because the European Central Bank launched quantitative easing last week.

At the end of the week, the Bureau of Economic Analysis will release the initial estimate of fourth quarter GDP. The average of analyst estimates is 3.2 percent growth for the quarter.

Which Junk Bond ETF Is Best For 2015? Part 2

A Seeking Alpha Contribution

In part one, we compared the two largest high-yield bond funds: the iShares iBoxx $ High Yield Corporate Bond (NYSEARCA:HYG) and the SPDR Barclays Capital High Yield Bond (NYSEARCA:JNK).

In part two, we will compare two short-term high-yield bond funds: the PIMCO 0-5 Year High Yield Corporate Bond (NYSEARCA:HYS) and the SPDR Barclays Short Term High Yield Bond (NYSEARCA:SJNK).

Short-term high-yield bonds are attractive for their shorter duration, yet still have nearly as high of an yield. Even though these two funds have durations roughly 2 years shorter than HYG and JNK, their yields are comparable due to wider spreads versus treasuries at the short end of the yield curve. SJNK’s 30-day SEC yield of 5.85 percent is higher than HYG’s 5.68 percent yield and nearly as high as JNK’s 6.15 percent yield.

Index & Strategy

HYS tracks the BofA Merrill Lynch 0-5 Year US High Yield Constrained Index while SJNK tracks the Barclays US High Yield 350mn Cash Pay 0-5 Yr 2% Capped Index. HYS is the older of the two, coming to market in June 2011, while SJNK launched in March 2012…. To Continue Reading Please, Click Here.

*Please note, this article was written and published as a contribution for Seeking Alpha. To finish reading the article you will be redirected to their site.