ETFs

Fed Tapering Could Hurt This ETF...And It's Not One You'd Expect

ETF Professor — Fri, 24 May 2013 20:24:19 +0000

One of this week's most prominent themes has been speculation that the Federal Reserve is either going to wind down or soon end its $85 billion per month asset-buying activities. Not surprisingly, that has not been particularly good news for U.S. stocks and other riskier assets.

Beyond the usual ETF suspects such as mortgage-backed securities, mortgage REIT funds and high beta sector plays that could be harmed by the end of quantitative easing, a surprising candidate for end-of-QE vulnerability has entered the conversation. That ETF is the iShares MSCI Turkey Investable Market Index Fund (NYSE: TUR), one of 2013's emerging markets ETF stars.

Barclays published a list of investments that could be hit if QE ends and Turkish stocks made that dubious cut.

"Investors who are concerned about the reversal of Fed easing should consider short positions in assets with high elasticities to the Fed and expensive valuations versus history. Turkish equities and US defensives appear vulnerable," according to part ...

Market Wrap for Friday, May 24: Stocks Close Week Near Unchanged Mark

Scott Rubin — Fri, 24 May 2013 20:20:46 +0000

A day after a sell-off hit much of the world, but spared the United States, the U.S. market was essentially flat on the last trading session of the week. Although there are signs that a pullback may be imminent, investors continue to pour money into U.S. stocks on expectations that the bull market will continue. Although the S&P 500 finished slightly lower on the week, the widely watched average is already up a little less than 16 percent in 2013.

Major Averages

The Dow Jones Industrial Average climbed a little less than 9 points, or 0.06 percent, to 15,303.

The S&P 500 fell around 1 point, or 0.06 percent, to 1,650.

The Nasdaq lost less than a point, or 0.01 percent, to close at 3,459.

Durable Goods

Durable goods orders rose 3.3 percent in April after falling 5.9 percent for March. This came in ahead of the consensus which expected durable goods orders to rise 1.6 percent.

Excluding transportation, durable goods orders increased 1.3 percent in April after falling 1.7 percent in March. This compared to consensus estimates calling for an increase in durable goods for April of 0.5 percent.

Commodities

Energy prices were mixed to end the trading week. Late in the day, NYMEX crude futures were down 0.32 percent to $93.95. Brent contracts were last up 0.11 percent to $102.55. Natural gas fell around 0.59 percent on the day and was last trading at $4.24.

Precious metals were marginally lower on the session. Heading ...

It's Time to Think About Obscure Middle East ETFs

ETF Professor — Fri, 24 May 2013 18:16:23 +0000

Geopolitical concerns and perceived liquidity risk are among the issues that have kept investors from embracing Middle East stocks and ETFs in recent years. A prime example of a market hampered by those issues is Egypt.

The Market Vectors Egypt ETF (NYSE: EGPT), the lone ETF devoted exclusively to North Africa's largest economy, has had its share of struggles at the hands of negative news flow. However, that does not mean the entire Middle East investment thesis is damaged. Actually, the opposite is true.

"The Middle East markets may be associated with higher levels of risk as a result of the seemingly constant conflict-oriented headlines coming out of the region (i.e., from Israel, Syria, Iran, Iraq, Egypt, to name just a few of the dicey spots)," said WisdomTree Research Director in a new research note. "Yet at least the market moves this year illustrate that not all news is bad. Many of the Middle East economies are growing as they develop significant infrastructure spending with their oil wealth in an effort to diversify their economies."

Indeed, some Middle East markets, many of which are classified by index providers as frontier markets, are found among the world's high fliers in 2013. ...

Consider Fundamentals Before Bailing on Japan ETFs

ETF Professor — Fri, 24 May 2013 17:06:35 +0000

Perhaps Japanese stocks and the corresponding ETFs had things too good and too easy to start 2013. The abridged version of the story goes like this: Prime Minister Shinzo Abe garnered more confidence among average Japanese citizens than his recent predecessors, the yen tumbled against the U.S. dollar to levels not seen in several years and Japanese stocks responded by becoming Asia's best performers this year.

Then came Thursday, a day that saw Japanese stocks suffer their worst one day performance in more than two years. Friday's Asian session was no day at the beach, either. The Nikkei 225 started the day in fine fashion only to careen down to 14,000, before rebounding by more than 600 points. Days like Thursday and Friday are enough to make participants question the veracity of Japan's rally and some analysts have done just that.

This may be a "blood on the streets" scenario where cooler heads eventually prevail, particularly if USD/JPY continues to rise.

"With the equity market rising in conjunction with earnings expectations, I believe the case for Japan's equity markets is intact," said WisdomTree Research Director Jeremy Schwartz in a note. "A ...

ETFs to Watch May 24, 2013 (EWJ, VDC, XLU)

ETF Professor — Fri, 24 May 2013 10:12:38 +0000

Here is the ETF Professor's ETF Watch List for Friday May 24, 2013.

The Global X Silver Miners ETF (NYSE: SIL) is worth a look.

Obvious plays of the day: iShares MSCI Japan Index Fund (NYSE: EWJ) and the Utilities Select Sector SPDR (NYSE: XLU).

Keep an eye on the Vanguard Consumer Staples ETF (NYSE: VDC).

Emerging ...

Market Wrap for Thursday, May 23: Wall Street Shrugs Off Global Slump

Scott Rubin — Thu, 23 May 2013 20:30:42 +0000

Thursday's trading session may have been the most glaring example of just how powerful the bull market in U.S. stocks is right now. Even though all of the major averages closed slightly lower on the day, the U.S. market was able to shrug off a global rout in stock prices that began with a 7.3 percent crash in the Nikkei.

The catalyst for the sell-off in Japan centered on concerns about a slowing Chinese economy after a purchasing managers index contracted in May. Despite the steep sell-off in the Nikkei, the country's equity market is still up nearly 40 percent in 2013 after the Bank of Japan launched a massive stimulus program to fight deflation.

In addition to the plunging Nikkei, losses rippled throughout much of the world, with the exception of the United States. The Hang Seng lost 2.54 percent and the major European equity indices were all down a little more than 2 percent on the day.

Major Averages

The Dow Jones Industrial Average lost a little less than 13 points, or 0.08 percent, to 15,294.

The S&P 500 fell around 5 points, or 0.29 percent, to close just above 1,650.

The Nasdaq lost roughly 4 points, or 0.11 percent, to 3,459.

Jobless Claims

The initial claims level fell to 340,000 for the week ending May 18 compared to an upwardly revised 363,000 for the week ending May 11. This came in better than the consensus expected, with estimates for initial jobless claims pegged at 348,000.

Continuing claims fell from 3.024 million for the week ending May 4 to 2.192 million for the week ending May 11. This compared to consensus expectations calling for a decline to 3.005 million.

New Home Sales

New construction home sales rose 2.3 percent in April to 454,000. This compared to sales of 444,000 in March and came in well ahead of consensus estimates calling for new home sales of 425,000 for April. Prices for new homes also rose sharply last month, recording a year over year gain ...

Nigeria ETF Gets Good News on Glum Day For Global Markets

ETF Professor — Thu, 23 May 2013 20:24:55 +0000

On Thursday, China sneezed, Japan caught the cold, and ETFs tracking a plethora of global markets closed lower.

Predictably, emerging markets sagged with the Vanguard MSCI Emerging Markets ETF (NYSE: VWO) and the iShares MSCI Emerging Markets Index Fund (NYSE: EEM) closing down. Developed markets offered little refuge as the iShares MSCI EAFE Index Fund (NYSE: EFA) lost about 1.5 percent.

In the sea of red of global ETFs Thursday, at least one surprising fund held up relatively well. Believe it or not, on a day when so-called traditional developed and emerging markets ETFs were being taken to task, the newly-minted Global X Nigeria Index ETF (NYSE: NGE) fell 0.9 percent. Notably, NGE's loss occurred on volume that was about 30 percent above ...

Analyst Suggests Caution on Popular Japan ETF

ETF Professor — Thu, 23 May 2013 17:53:30 +0000

Following Thursday's savage plunge that saw Japanese stocks notch their worst one-day performance in more than two years, it is no surprise that ETFs focused on the world's third-largest economy are tumbling today.

That group includes the WisdomTree Japan Hedged Equity Fund (NYSE: DXJ), an ETF that has gained rock star status in 2013 as the yen has plunged, boosting Japanese stocks in the process.

At this writing, DXJ is down about 5.6 percent, but is off its worst levels of the day that saw ETF down more than eight percent. Before Thursday, DXJ was up a jaw-dropping 28.4 percent in the past three months. Now home to almost $10.8 billion in assets under management, DXJ has been the top asset-gathering ETF ...

These ETFs Could Surge if MSCI Obliges

ETF Professor — Thu, 23 May 2013 16:36:34 +0000

On June 11, index provider MSCI (NYSE: MSCI) will announce its annual market reclassification review. Results of that review will be significant for investors in scores of emerging and frontier markets equities and ETFs.

South Korea and Taiwan are still under consideration for a promotion to developed market status, which if that promotion happens, should move the iShares MSCI South Korea Index Fund (NYSE: EWY) and iShares MSCI Taiwan Index Fund (NYSE: EWT) among other emerging markets ETFs.

Given MSCI's history of not upgrading those countries to developed market status, investors may not want to bet on the promotion happening. However, some other ETFs that have recently been bullish performers have a chance to extend those gains if MSCI obliges.

The obliging would come in the form of MSCI upgrading Qatar and the United Arab Emirates to emerging markets status from their current designation as frontier markets. Some investors believe the move should have already happened.

"I see no reason why they shouldn't be upgraded and don't understand why they haven't ...

ETFs to Watch May 23, 2013 (IEF, SLV, TAN)

ETF Professor — Thu, 23 May 2013 11:23:47 +0000

Here is the ETF Professor's ETF Watch List for Thursday May 23, 2013.

Keep the an eye on the Guggenheim Solar ETF (NYSE: TAN).

The iShares Silver Trust (NYSE: SLV) remains in play.

Give the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP) a look.

Hedge your bets with the ProShares UltraShort S&P500 (NYSE: SDS).

Emerging ...

An ETF For Elon Musk Fans

ETF Professor — Wed, 22 May 2013 20:20:20 +0000

Few U.S. chief executive officers are as hot as Elon Musk these days. Musk is the CEO of not one, but two of the highest flying publicly traded companies in the U.S. SolarCity (NASDAQ: SCTY), the maker of solar energy systems for business and residential customers, has seen its shares more than double in the past month.

Musk's other company, electric car maker Tesla (NASDAQ: TSLA) is up about 74 percent in the past month. Indeed, it is a good time to be Elon Musk and it is has been a good time for his fans that have bought shares of SolarCity or Tesla.

Despite the popularity of Musk and his companies, accessing both stocks via one ETF is currently difficult. One ETF can be considered the Tesla ETF, that being the First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ: QCLN). QCLN allocates over 15 percent of its weight to Tesla.

Solar City for all ...

Market Wrap for Wednesday, May 22: Stocks Pullback As Bernanke Says Bond Buying Could Slow

Scott Rubin — Wed, 22 May 2013 20:19:04 +0000

In Congressional testimony on Wednesday, Federal Reserve Chairman Ben Bernanke said that the central bank could begin winding down its $85 billion-per-month bond-buying program at one of its "next few meetings."

Minutes from the May FOMC meeting, however, showed that there is no consensus about when to begin pulling back on the stimulus. The decision will likely be significantly influenced by the trajectory of the economy in coming months.

The comments spooked investors who have been enjoying a near continuous rally in in U.S. stocks in 2013. The major averages fell throughout much of the session and closed near their worst levels.

Major Averages

The Dow Jones Industrial Average lost 80 points, or 0.52 percent, to 15,307.

The S&P 500 fell 14 points, or 0.83 percent, to 1,655.

The Nasdaq shed almost 39 points, or 1.11 percent, to 3,463.

Existing Home Sales

Home sales improved slightly in April, rising to 4.97 million from 4.94 million in March. Nevertheless, this came in below consensus expectations calling for an increase to 4.98 million.

Commodities

Crude oil prices fell along with the stock market on Wednesday. Late in the day, NYMEX crude futures were down around 2 percent to $94.20. Brent crude futures had lost 1.35 percent to $102.51. Natural gas was last trading down 0.14 percent to $4.19.

Precious metals also fell along with the market. Heading into the close of equities, COMEX gold futures were down 1.35 percent to $1,359.00. Silver contracts had lost a little less than 1 percent to $22.25. Copper futures were last up 0.51 percent on Wednesday.

The grain complex was higher across the board on the session. At last check, corn ...

Apple Tops New WisdomTree Dividend ETF

ETF Professor — Wed, 22 May 2013 18:08:54 +0000

Apple's (NASDAQ: AAPL) new status as a dividend stock is, no pun intended, bearing fruit. At least at the new ETF level.

The WisdomTree U.S. Dividend Growth Fund (NASDAQ: DGRW), which debuted today, features the iPad maker as its largest holding with a weight of 4.71 percent.

Aside from making for good headlines, such as the one on this article, Apple's ascent to the top of any dividend ETF is a sign of a growing theme in the dividend ETF space. That being the move toward those funds that focus on weighting metrics beyond length of dividend increase streaks.

"Investors are hungry for income in this low interest rate, low yield environment," said WisdomTree Research Director Jeremy Schwartz in a statement. "Rather than relying on historical records of dividend increases, DGRW uses real-time growth and quality metrics focused on companies who are growing their dividends."

Part of the focus on stocks that are showing favorable dividend growth going forward includes the WisdomTree U.S. Dividend Growth Fund allocating over 20 percent of its weight to the technology sector, the sector currently leading the market's dividend growth. ...

These Energy ETFs Are Breaking Out

ETF Professor — Wed, 22 May 2013 17:05:00 +0000

It has been said the S&P 500's ascent to what feels like a string of never ending new highs has been a rally short on risk-taking and long on low beta fare.

At the sector level, and it is sectors that lead equity markets not vice versa, there are signs risk is coming back into style.

Energy is one of the higher beta sectors that has been showing signs of promise. In the past month, the Energy Select Sector SPDR (NYSE: XLE), the largest energy ETF by assets, has surged 10.3 percent and is showing signs of a major technical breakout.

Chris Kimble of Kimble Charting Solutions notes XLE just cleared horizontal resistance and now resides about 10 percent from its 2008 highs. Interestingly, Tuesday's for NYMEX-traded oil was just under $96 per barrel. In other words, oil futures are nowhere close to being just 10 percent below the 2008 highs.

XLE is not the only equity-based energy based that has broken out is or on the cusp of doing so. Here are a few more ETF ideas for an ongoing energy sector rally.

PowerShares Dynamic Energy Exploration & Production Portfolio (NYSE: PXE)
By the standards of many energy ETFs such as XLE, PXE is small ...

ETFs to Watch May 22, 2013 (CUT, EWW, HYD)

ETF Professor — Wed, 22 May 2013 10:31:54 +0000

Here is the ETF Professor's ETF Watch List for Wednesday, May 22, 2013.

The SPDR Gold Shares (NYSE: GLD) looks terrible.

The First Trust ISE-Revere Natural Gas Index Fund (NYSE: FCG) does not.

Keep an eye on the Guggenheim Timber ETF (NYSE: CUT).

Emerging markets plays of the day: iShares MSCI All Peru Capped Index Fund ...