Markets Consolidate as Tech Leads the Way

It was a slightly positive week for U.S. markets as the S&P 500 rose 0.24%, and the NASDAQ was up 0.35%. Global markets pulled back after their recent bounce, and the MCSI Emerging Markets Index fell 0.79%.

Nevertheless, you had several big gainers in your Alpha Investor Letter portfolio this past week.

The Blackstone Group L.P. (BX) added 4.61% after it and GIC Private Ltd. announced a joint $750-million minority stake in human-resources software giant Kronos Inc. last week.

The iShares MSCI Ireland Capped Investable Market Index (EIRL) gained 3.65%, continuing its strong recovery, even as Zacks Equity Research upgraded EIRL to a rank of “2 – Buy,” citing the positive recovery of the Irish economy.

Las Vegas Sands Corp. (LVS) rose 3.16% as investors began to shift their attention to Japan’s potential as the new gambling market in Asia, as it is developing plans to allow casino-based gambling in the next two years. Las Vegas Sands CEO Sheldon Adelson said that he would “spend whatever it takes” to build casinos in Japan. So much so that when recently questioned, Mr. Adelson responded with a simple, “Would I put in $10 billion? Yes.” You can see another of my “Asia’s Las Vegas” related recommendations in this recent article on Marketwatch.

In a sign of the booming tech market, both Google Inc. (GOOG) and First Trust US IPO Index (FPX) hit new all-time highs. Google was boosted by Samsung’s unveiling of its new next-generation Samsung Galaxy S5 smartphone. The Galaxy S5 now stands as the most advanced smartphone on the planet and is expected to drive tens of millions more users into Google’s ecosystem.

The WisdomTree Japan SmallCap Dividend (DFJ) moved back above its 50-day moving average and is now a BUY, as are all of your other Alpha Investor Letter recommendations.

Overall, all but one of your current Alpha Investor Letter recommendations are showing a profit. Visa (V) is showing a triple-digit percentage gain of 135.52%, while Berkshire Hathaway (BRK-B), iShares MSCI Ireland Capped Investable Market Index (EIRL), Google Inc. (GOOG), Market Vectors Biotech RTF (BBH), First Trust US IPO Index (FPX), the Guggenheim Spin-off Index (CSD) and the Blackstone Group (BX) are showing double-digit percentage gains between 13.2% and 49.94%.

After a lot of handwringing, the S&P 500 has bounced back quickly to test its recent all-time highs. If the market can break through this level, it will be very bullish — at least until we head into the quiet summer period. At the same time, the U.S. markets are now overbought on the short term and likely to consolidate their recent gains over the next week or two weeks.

The good news is that the Nasdaq has broken out to new highs. That also makes the current rally relatively narrow, as tech and healthcare — think of your positions in Goggle (GOOG), First Trust US IPO Index (FPX) and the Market Vectors Biotech ETF (BBH) — continue to zoom ahead, while broader sector bets like Berkshire Hathaway (BRK-B) have been lagging of late. The next few weeks will be crucial in determining which direction the markets will take.

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