Chicago, IL – November 16, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (AAPL), Microsoft Corp (MSFT), Quality Systems Inc. (QSII), Allscripts-Misys Healthcare Solutions, Inc. (MDRX) and Cerner Corp. (CERN).

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Here are highlights from Friday’s Analyst Blog:

Apple Opens New Store in New York

Apple Inc. (AAPL) will open its newest retail store with an 8,500 square feet retail space in New York tomorrow. The store will help Apple deliver more Macs, iPods and iPhones, taking advantage of the coming holiday season. The new store is the fourth in Manhattan and fifteenth in New York.

To ensure a high-quality buying experience for its products, in which service and education are emphasized, the company has expanded and improved its distribution capabilities by opening its own retail stores in the U.S. and internationally.

The company operates a network of 280 retail stores in 10 countries across the world, including the U.S., U.K., Italy, Australia, Canada, Japan, China, Switzerland, Germany and France to drive the demand for its other products. Further, Apple is soon to open two new stores in Shanghai as well as London and Paris.

The company further plans to open 40 to 50 new larger retail stores next year, about half of which are expected to be outside the U.S. Apple had earlier estimated that it would open 25 to 50 new stores.

Retail sales increased 4.0% to $6.57 billion (averaging $26.0 million per store annually). Store traffic grew to around 170 million in fiscal 2009. The company has extended its footprint in international retail markets. Growing its presence in the international retail market, Apple opened its first store in Sydney and Beijing and opened stores in Switzerland, France and Germany during the calendar year 2008.

Apple's business strategy leverages its ability, through the design and development of its own operating system, hardware and many software applications and technologies, to provide its customers around the world with compelling new products and solutions, superior ease-of-use, seamless integration and innovative industrial design.

To attract customers during the holiday season, the company plans to offer gift-wrapping of any iPod or portable Mac for just $5. It will also allow customers to set aside a gift and pick it up at their local Apple store for free from Dec. 15 to Christmas Eve.

Apple’s stores hosted 42.7 million visitors during the last quarter, an increase of 7% from the year-ago period. The stores posted revenue of $1.87 billion ($7.6 million per store) in the quarter, the highest level ever and up 15% from the year-ago period.

Last month, Microsoft Corp (MSFT) announced the opening of its own first retail store in Arizona. But we do not expect Microsoft to catch up anytime.

Quality Systems Barely Beats

Quality Systems Inc. (QSII) reported fiscal second-quarter earnings of 41 cents, beating the Zacks Consensus Estimate by a penny and the year-ago earnings by 4 cents.

Total revenues for the quarter increased 21.5% to $71.69 million from $58.98 million. The company’s NextGen Healthcare Information Systems division posted revenue of $67.4 million for the reported quarter, representing a 23% increase from the previous year.

Category-wise, System sales, including software, hardware and supplies, increased 5.9% to $26.24 million from $24.78 million. Revenues from maintenance, electronic data interchange (EDI), revenue cycle management (RCM) and other services grew 32.9% to $45.46 million from $34.19 million in the year-ago period.

The total cost of system sales, including software, hardware and supplies increased 16.8% to $7 million. Total cost of maintenance, EDI, RCM and other services for the quarter were $21.27 million as against $15.2 million in the year-ago quarter, up 39.9%. Consequently, total cost of revenues for the quarter increased 33.4% to $28.3 million. The company reported a gross profit of $43.4 million for the quarter opposed to $37.8 million in the year-ago period, up 14.8%.

Research & development spend for the quarter increased 30% to $4.34 million for the quarter. Selling, general and administrative expenses for the reported quarter increased 11.7% to $20.4 million.

Quality Systems exited the quarter with cash and cash equivalents of $75.4 million opposed to cash and cash equivalents of $70.2 million at the end of fiscal 2009.

Quality Systems, headquartered in Irvine, California, develops and markets healthcare information systems that automate certain aspects of medical and dental practices, networks of practices such as physician hospital organizations and management service organizations, ambulatory care centers, community health centers, and medical and dental schools. The company competes with players like Allscripts-Misys Healthcare Solutions, Inc. (MDRX) and Cerner Corp. (CERN).

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Visit: www.zacks.com

The company swung to a GAAP net income of $86.9 million or $1.18 per share from a net income of $75 million or $1.04 in the year-ago period. Results came in 3 cents ahead of the Zacks Consensus Estimate of $1.15.

The quarterly results benefited from position limitations on speculators, sweeping regulatory reforms, lower expenses and record futures trading. The upside was also attributable to growth in the company’s core businesses, significant progress from new initiatives and stronger margins.

The company could benefit as more over-the-counter contracts are exchange-traded and cleared, but could suffer if U.S. regulators impose new commodity-market position limits.

Net revenues increased 27.2% year over year to $256.3 million. The growth was primarily attributable to 34% increase in consolidated transaction and clearing fee revenues in the quarter driven primarily by new products, strong trading volumes in ICE's futures and OTC energy segments, continued growth since the launch of ICE Clear Europe in November 2008 and the addition of OTC credit derivatives execution, processing and clearing services.

Average daily futures volume increased 24% whereas, average daily commissions in ICE's OTC energy business jumped 12% in the quarter boosting total transaction and clearing fees by 34%.

Total operating expenses increased 41.3% year over year to $116.3 million mainly due to a $27 million rise in expenses relating to ICE's credit derivatives execution, processing and clearing initiatives, including compensation expenses and amortization of intangibles. Expenses included amortization expense for Russell license agreement totaling $6.5 million, compared to $0.7 million in the prior-year quarter.

At the end of Sept 30, 2009, ICE had 821 employees and expects to increase its headcount by 1% to 2%.

The transatlantic exchange, which operates across over 50 countries, is headquartered in Atlanta, with offices in New York, London, Chicago, Winnipeg, Calgary, Houston and Singapore. The company operates leading regulated exchanges, trading platforms and clearing houses serving the global markets for agricultural, credit, currency, emissions, energy and equity index markets.

ICE’s rival CME Group Inc. (CME) reported third-quarter earnings of $3.35 per share earlier last week, beating the consensus forecast by 5 cents.

(From Bloomberg)

U.K. gross domestic product unexpectedly dropped in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record.

Gross domestic product dropped 0.4 percent from the previous three months, the Office for National Statistics said today in London. Economists predicted a 0.2 percent increase, according to the median of 33 forecasts in a Bloomberg News survey. The economy has now contracted in six quarters, the most since records began in 1955.

Chancellor of the Exchequer Alistair Darling said this week he will focus on spurring economic growth as he struggles to cement a recovery in time for a general election due by June. Today’s data may add to pressure on Bank of England officials to expand bond purchases at their Nov. 5 decision after completing a plan to buy 175 billion pounds ($291 billion) in assets.

Where goes Sterling on this?

Back in March, copper and copper stocks were behaving differently from the rest of the market. Copper mining stocks hit their lows in November and then roared from there. They were not hitting new lows in March like the rest of the overall stock market.

Copper was also on a tear at that time, hitting a 3-month high on Mar 6.

Copper prices and copper stocks were both sending a signal of the bull to come.

Copper mining stocks are jumping

The copper miners have rallied big in the last 11 months.

Southern Copper Corporation (PCU) is up 200% off its November lows. It is now a Zacks #1 Rank (strong buy) stock as estimates are rising.  See the Oct 1 Momentum Rank Buy for all the juicy details.

Southern Copper is more expensive than when we last looked at it on Mar 6. Back in March it was trading with a forward P/E of 9.15 and now it's got a hefty P/E of 33.

Freeport McMoran Copper & Gold Inc. (FCX) has seen its stock soar 292% off its Nov 20 low of $17.27.

The Zacks Consensus Estimates have moved sharply higher. The 2009 estimate has more than doubled to $3.22 per share from $1.44 in just the last 3 months. Analysts are equally as bullish on the 2010 estimates which are even higher at $5.49 per share. FCX is also a Zacks #1 Rank (strong buy) stock.

Indian copper miner Sterlite Industries India (SLT) also saw its lows on Nov 20 and has since gained 306%.

Sterlite, however, is a Zacks #3 Rank (hold) stock. The fiscal 2010 Zacks Consensus Estimate is calling for earnings per share of 74 cents, with one analyst raising in the last week. Once again, analysts are more bullish about next year, as fiscal 2011 Zacks Consensus Estimates are holding at $1.23 per share.

What's the signal now?

Copper prices were still bullish in the third quarter of 2009. Prices rose 24% in the quarter and hit a peak in August of $2.9895 a pound. Comparatively, on March 6, prices hit a then 3-month high of $1.65 a pound.

But some signs of trouble have appeared in the copper market. Copper imports have slowed into China, some of which was expected given the big purchases in the first six months of the year as the Chinese stimulus plan kicked into gear. Chinese imports fell 13.9% in August from July.

Inventories in London, however, are at their highest levels since May suggesting that without China there isn't much other worldwide demand. The result has been a weakening of prices as copper fell 11% in September.

The copper fundamentals are no longer as bullish as March. With copper now weakening, Dr. Copper could be signaling a slowdown in the recovery that is soon to come.

Copper stocks have had a nice upward trajectory off the November lows. However, in September, the stocks made fewer new highs as copper prices fell.

Is this stock weakness another signal?

See the six month charts of PCU, FCX and SLT below:

[In full disclosure, the author of this article owns share of PCU and FCX.]

Do our well-used Greek letters help us make sense of the investment landscape, or do they actually hamper us in managing money? As James Montier, formerly of Societe Generale’s asset allocation team, now with Boston-based fund manager GMO, pointed out in an article published in 2007, as soon as you use the terms “alpha” and “beta,” you are invoking the spirit of the capital asset pricing model.

And, unfortunately, CAPM doesn’t actually work in practice.

Why not? Apart from some questionable assumptions about frictionless trading and investors having identical goals, the key problem with CAPM is that it assumes that stock returns are normally distributed. In other words, the theory requires that stock prices follow a random walk, with the price movement in one period entirely independent from that in all previous periods, and having no bearing on the future, either. This “Brownian motion” assumption produces the famous bell curve of statistics when one measures the percentage gains and losses over many time intervals.

However, while the bell curve accurately maps many phenomena in nature—people’s heights and weights, for example—many studies have now shown that it is inaccurate when describing financial market movements. Stock prices, which reflect the collective mood of millions of people, move according to far wilder trajectories, and there is plenty of evidence that markets have “memory”—which shows up in the serial correlation of returns. Even volatility tends to occur in “clusters.”

By viewing the world through the lenses of “alpha” and “beta,” you are automatically assuming a linear relationship between risk and return, with risk measured only according to a bell curve framework. Take away the framework, and the terms have no real meaning at all. So why do we persist with them? Part of the reason for the continuing popularity of the Greek letters is that we use them as a kind of shorthand—beta for passive, systematic, indexed; and alpha for active, more subjective, discretionary. And, of course, in the fund management world, while beta has meant (relatively) low fees, the claim of being able to source “alpha” has been the road to riches for fund providers.

But, just as it’s possible (and indeed, statistically likely) for the self-proclaimed alpha-seeker to deliver below-market performance, it’s just as likely that well-thought-out, entirely model-driven systematic approaches can generate superior returns over time.

At this week’s Terrapinn ETF conference in London, Chris Sutton of Watson Wyatt predicted a change in trend in the investment management industry, away from the artificial separation of alpha and beta and towards a more holistic approach. Sutton also argued that the ETF world needs to move from a period of product proliferation to one of increased innovation in index design.

I agree wholeheartedly with this, and would like to see a great deal more systematic strategies offered to investors in ETF format. As ever, the challenge will be to make these investment approaches understandable and transparent, without losing their competitive edge. But there are surely great opportunities out there for those who can hit the correct fund design. Isn’t it time to send at least two of our friendly “Greeks” back to the language classroom?

Just as gold is showing its strongest performance in a year, exchange-traded fund provider ETF Securities is set to launch its first bullion-backed gold fund. The ETFS Physical Swiss Gold Shares, backed by one-tenth of an ounce of Swiss-stored physical bullion per share, is set to begin trading on Wednesday through the NYSEArca exchange under the ticker SGOL.

ETFS Physical Swiss Gold Shares will go head-to-head in competition with existing bullion-backed ETFs such as SPDR Gold Trust (NYSEArca: GLD) and iShares COMEX Gold Trust (NYSEArca: IAU), both of which have hit 52-week highs this week on a surging gold price.

Gold ETF holdings have risen 42 percent, or 16 million ounces year-to-date. Bullion-backed ETFs hold 54.23 million ounces of gold, more than many central banks and around the levels of last year’s total production amount. (See Wall Street Journal story here.)

The ETFS Physical Swiss Gold Shares is ETF Securities’ second commodity-based fund to launch in the past three months. In July, the provider launched ETFS Silver Trust (NYSEArca: SIVR), which has risen 18% since then. The new ETF is the firm’s third to date, following London Stock Exchange Traded Gold Bullion Securities (LSE: GBS.L) and ETFS Physical Gold (LSE: PHAU.L).

“We think the U.S. equity ETF market is very competitive and arguably very saturated. But we feel that the U.S. commodities marketplace is under-served,” said William Rhind, head of London-based ETF Securities’ U.S. marketing unit in a recent interview with IndexUniverse.com. (See story here.)

In Asia trading Wednesday, gold was selling for around $1,002 an-ounce in Singapore. However, technical traders were advising hedge funds to use the high gold price as an opportunity to sell the commodity short, for a quick dip to around $940 an ounce. (See story here.)

Gold ETFs were volatile in Tuesday trading, rising initially and falling back to end the day around 1.1 percent lower.

Chicago, IL – September 2, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: PetroChina Company Ltd. (PTR), Sinopec (SNP), Total SA (TOT), CNOOC Ltd. (CEO) and Vodafone (VOD).

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Here are highlights from Tuesday’s Analyst Blog:

PetroChina Sings 'O Canada'

Yesterday, PetroChina Company Ltd. (PTR), the largest integrated oil company in China, agreed to pay C$1.9 billion ($1.7 billion) to acquire a majority stake in two oil sands projects in western Canada.

As per the terms of the agreement with Athabasca Oil Sands Corp. (a privately held Calgary-based group), the Chinese energy giant will purchase a 60% working interest in the Canadian company’s proposed MacKay River and the Dover ventures in northern Alberta. The deal, which awaits certain regulatory approvals, is currently the largest venture by China in Canadian oil sands.

According to an independent third party evaluation, the oil sands that PetroChina plans to exploit are estimated to contain as many as five billion barrels of reserves, about half of Athabasca’s total recoverable resources. Peak production from the two sites is projected to reach 300,000 – 500,000 barrels per day, with first volumes expected in 2014.

The agreement calls for the Chinese behemoth to provide certain financing arrangements for Athabasca, ensuring timely development of the MacKay River and Dover projects. In general, oil sands projects are characterized by long-term capital-intensive investments that require huge up-front expenditures. The total capital cost to develop the MacKay River and the Dover properties are estimated to be in the range of C$15 – C$20 billion.

Oil sands, also known as tar sands, are naturally occurring mixtures of bitumen (a sticky, tar-like form of petroleum), water and sand that are found in large deposits in Athabasca, Peace River, and Cold Lake in Canada 's Alberta province. The oil sands in northern Alberta hold the largest crude reserves outside the Middle East.

We see this transaction as part of PetroChina’s long-term strategic plan to explore one of the world's largest untapped oil regions and supplement its conventional reserves.

In recent times, oil sands have drawn growing interest from Chinese energy groups. Sinopec (SNP) owns a 10% stake in a planned Total SA (TOT) project, while CNOOC Ltd. (CEO) bought a 17% interest in a small privately held oil sands project.

Vodafone Accelerates 3G

Vodafone (VOD) reportedly upgraded its 3G mobile broadband network to offer maximum theoretical download speed of 14.4 megabits per second (Mbps). However, users will get a practical download speed of up to 10.8 Mbps. The upgraded service will be initially available to the customers across London, Birmingham and Liverpool and extended to the rest of UK in due course

The world’s largest revenue-generating wireless carrier launched its 3G services in 13 countries in fiscal 2008. Vodafone’s 3G wireless broadband technology is based on High-Speed Downlink Packet Access (HSDPA) and provides peak data rates of up to 7.2 Mbps. It spent over £14 billion ($28 billion) to obtain 3G wireless licenses in various countries, devoting nearly 40% of capital expenditure to expand its 3G network.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Investors see Hungary becoming “significantly” less risky, allowing for further reductions in interest rates, central bank Deputy Governor Ferenc Karvalits said. “Over the past few months, international risk appetite has improved significantly, the risk assessment of the region and Hungary has stabilized, and this allows for further easing of monetary conditions,” Karvalits said in an interview on Kossuth Radio today.

The Magyar Nemzeti Bank lowered its benchmark interest rate by half a percentage point to 8 percent on Aug. 24 as it works to jolt the economy out of its worst recession in 18 years. The bank has shaved 1.5 points off the key rate since July as confidence rises in the first European Union nation to get a bailout. Hungary received 20 billion euros ($28.5 billion) in an emergency loan from the International Monetary Fund, the EU and the World Bank.

The country has a “good chance” to finance its budget deficit from the market and may not need the next installment of the IMF loan, Karvalits said. The forint weakened 0.3 percent against the euro and was trading at 268.82 at 7:48 a.m. in Budapest.

You see, one of the principal reason why Hungary is in such a mess is that as inflation shot up in the months leading up to the crisis Hungary chose to loosen its peg against the Euro. At the time, the rationale seemed wise albeit very bold. In an environment where investors were willing to take risk (i.e. hunting for yield) their objectives could be aligned with that of public authorities in the sense that the former got their yield whereas the latter got the nominal appreciation needed to keep inflation in check.

It did not work quite like that.

As the crisis hastened its grip on global markets and as its locus steadily moved to Eastern Europe the Hungarian Forint plummeted and lay bare the country's vulnerabilities in the context of balance sheet (on the liability) side denominated in Swiss Francs. The result was that Hungary crashed into a recession unable to tweak monetary policy downwards because of a fear that this would scythe the Forint and thus essentially bankrupt scores of households and companies. On the other, the government also had (and has) difficulties raising funds on international capital markets.

Now however things appear to have changed at least for a moment and Hungary's central seem poised to take advantage of the relatively benign market conditions to lower interest rates to support its ailing economy. The underlying idea is simple. If you believe that risk aversion is to stay low, the Forint should not be sensitive towards the lowering of nominal interest rates since after all the carry remains plentiful. In this way, my view is that Hungary's central bank is trying to claw back the control over monetary policy by locking in a lower interest rate for the Forint. The key question which we should be asking ourselves however is of course whether Hungary could actually be forced to raise rates further down the road to defend the Forint. Clearly, bets are being made inside Hungary at the moment that this is not the case.

This is very interesting in a practical as well as a theoretical sense as I have discussed for example in this post about carry trade and global monetary policy. More recently, Edward Hugh mused on the same topic (more or less) invoking the idea of the (eternal) triangle of monetary policy in an open economy context.

In the case of the Central Europe "four", Poland and the Czech Republic opted for maintaining their grip on monetary policy, thus accepting the need for their currency to "freefloat" and move according to the ebbs and flows of market sentiment. As it turns out this decision has served them remarkably well, since the real appreciation in their currencies which accompanied the good times helped take some of the sting out of inflation, while their ability to rapidly reduce interest rates into the downturn has lead to currency depreciation, helping to sustain exports and avoid deflation related issues.

The other two countries (Hungary and Romania), to a greater or lesser degree prioritised currency stability, and as a result had to sacrifice a lot of control over monetary policy, in the process exposing themselves to the risk of much more violent swings in market sentiment when it comes to capital flows. Having been pushed by the logic of their currency decision towards tolerating higher inflation, they have seen the competitiveness of their home industries gradually undermined, and as a consequence found themselves pushed into large current account deficits for just as long the market was prepared to support them, and into sharp domestic contractions once they were no longer disposed so to do.

Edward's account here is important since it alerts us to the fact that it was only at the very end that e.g. Hungary opted for float because it was believed that it would make the inflation problem go away. At that point however, the structural imbalances and essentially damage were already embedded in the system of course. Nevertheless, it is unequivocally the fact that Hungary, at the moment, is attempting to benefit from the relative benign market conditions which means that risk aversion remains relatively subdued.

Elsewhere in Market Land ...

If our little trip to Hungary suggests that risk is on, if only a little bit and potentially in the case of Hungary news elsewhere suggest that the waters are more choppy. Of course, none of this is earth shattering by any means of the word, but since much, if not everything, seems to be revolving around China at the moment it seems worthwhile to dwell at recent news on how China are expected to "tweak" its hitherto lax lending policies to skim the worst of the mounting bubble (quote below from Bloomberg).

China’s banking regulators are “tweaking” lending policies to remove “froth” from the system while growth remains the top priority for policymakers, according to Royal Bank of Scotland Group Plc. The goal is to manage risk exposure among banks and asset quality by checking lending from going into A-shares traded on the mainland and properties, Wendy Liu, Hong Kong-based head of China research at RBS ABN Amro, said in a report dated yesterday.

(...)

The banking regulator sent draft rule changes to banks on Aug. 19 that would require lenders to deduct all existing holdings of subordinated and hybrid debt sold by other lenders from supplementary capital, said the people, who have seen the document and declined to be named as the matter is private. This may cut lending by as much as 700 billion yuan ($102 billion), China International Capital Corp. said Aug. 24.

Of course, the main bias of the Chinese stimulus program and thus the authorities' objective remain one of promoting growth through the expansion of domestic investment and, one would assume, consumption. As RBS ABN Amro's Wendy Liu is quoted of saying; "policymakers have a far greater tolerance for asset-price appreciation over the medium term than before". That sounds about right to me even if I am no sage, at all, on China.

What is interesting in the case of the recent news from China was also the following piece by Bloomberg whose headline (Yen Strengthens as China Policy Concern Spurs Demand for Safety) makes a direct link between policies in China and risk sentiment in the market and thus also the movement of the Yen and the USD (remembering of course the narrative that repatriation of profits may ultimately be the main driver of the Yen at the moment).

The yen rose for a third day against the euro in the longest stretch of gains since July on concern Chinese production curbs would slow economic recovery, fanning demand for the relative safety of Japan’s currency. The currency gained versus major counterparts including the pound on speculation Japan’s exporters are repatriating earnings to take advantage of a new tax law. A government report today may show a faster contraction in the U.S. economy than previously estimated.

“We have talks from China cutting back expanding, trying to sort out the balance sheet and prevent too much reckless lending,” said Peter Frank, a London-based currency strategist at Societe Generale SA. “But domestic factors, like capital repatriation, are driving yen’s strength right now.”

Whether there is a history to be made here is debatable, but one thing is certain. China seems to have decidedly taken center stage in the global market discourse. Finally and essentially as a small footnote, yours truly took notice of the fact that despite the decidedly positive sentiment in the core of Europe at the moment on the back of the Q2 GDP print and upbeat confidence readings in Germany, aggregate retail sales continued their steady decline.

Whether all this signifies that risk is "on" or "off" I will allow the reader to decide for themselves. Personally, I am still bearish, but it is difficult to deny that the relative calm and positive environment that has prevailed since spring seems rather strong. I would expect sentiment to change once we return to "normal" in Q4 once the elections in Germany and Japan have been resolved and, more importantly, once OECD stimulus packages start to wane. Most importantly however, there is the situation in Southern and Eastern Europe still loom as the most likely harbringers of, if you will, black swans in which case risk almost surely would be off.

ETF Securities made a big splash with its new silver fund, SIVR. Next up on its wish list are funds focusing on gold, platinum and palladium.

William Rhind is head of sales and marketing at ETFS Marketing LLC, the U.S. arm of London-based ETF Securities. The U.S. unit opened operations in July with the launch of its first exchange-traded fund, the ETFS Silver Trust (NYSEArca: SIVR).

The former iShares executive for Barclays Global Investors’ European operations recently discussed with IndexUniverse.com’s Murray Coleman plans by ETFS to expand in the U.S. marketplace.

IU: Has a move into the U.S. been something that ETFS has been considering for awhile?

Rhind: Our chairman, Graham Tuckwell, invented the gold ETF in 2003 and launched the first gold ETF in Australia. The first ETF in the U.S., the SPDR Gold Shares (NYSEArca: GLD), was made possible by the structure invented by Graham. After launching the first gold product, ETF Securities was established in 2005, and we built the largest exchange-traded commodities business in Europe.

IU: And that led you to the U.S.?

Rhind: Yes. When you get to the size we are now, we feel very strongly that we want to be the leading provider of exchange-traded commodities products in the world. The natural extension to our franchise in Europe is to expand into the U.S.

We think the U.S. equity ETF market is very competitive and arguably very saturated. But we feel that the U.S. commodities marketplace is under-served. We want to set new standards for transparency and education and service in the U.S. commodity ETF market and see ample opportunities for future expansion.

IU: What areas could those expansion plans lead to in terms of new types of products?

Rhind: At the moment, if you look at our filings with the SEC, you can see that we’re initially planning on launching precious metals products in the U.S. (See full story here.) In Europe, we essentially offer all types of commodities products from single commodities to baskets and indices. In the U.S., we’d like to at least offer a subset of those products here initially.

IU: Specifically, what else is in your U.S. pipeline?

Rhind: We recently launched the ETFS Silver Trust. (See related story here.) SIVR is designed to track the price of silver, less the associated expenses. SIVR has been very well received in the U.S. and now has assets under management of over $85 million. We have also filed for gold, platinum and palladium. The palladium exchange-traded product would be the first of its kind in the U.S.

That would be true with the platinum as well. The gold product will compete against GLD. We’re still in the registration period, so I can’t say too much other than what is publically available, but the key difference is that the gold will be stored in Switzerland rather than the U.S. or London, as GLD does. By having a product vaulted in Switzerland, it removes concerns about the nationalization of gold as a product in the U.S. In 1933, the U.S. government confiscated personal holdings of gold through a special presidential order.

IU: Isn’t your existing European gold ETF stored in London?

Rhind: Yes, by providing two separate gold ETFs, we’re allowing for more diversification on the part of investors worldwide.

IU: The gold ETF is going to use J.P. Morgan as the head custodian. Why not appoint a Swiss custodian directly?

Rhind: Essentially, they’re a large precious metals custodian with tremendous resources to handle a large-scale global business. So we believe that scalability is going to be important. We want to work with someone who can facilitate the business as it grows, and J.P. Morgan is a partner who can provide that.

IU: How do you view the regulatory environment for commodities investing in the U.S.?

Rhind: The CFTC is investigating behavior in certain futures markets. But the commodity market as a whole continues to function the way it always has. When it comes to commodity ETFs, there has been some scrutiny on some of the energy products that utilize futures contracts. However, the SEC just approved issuance of additional shares for UNG [U.S. Natural Gas Fund] which is a positive step for the industry.

I think the majority of people recognize that ETF or index investors are generally long-term investors by nature. They want transparency, liquidity and stability in markets. Overall, we feel there is a positive regulatory environment in the U.S. for new commodity ETFs. People accept and understand physical asset-backed commodities funds like gold or silver, and the return profile is easy to understand. After all, gold funds actually physically hold bullion and silver funds like SIVR actually holds silver bullion.

IU: Commodities are still just a small portion of most investment portfolios, aren’t they?

Rhind: Correct, but they’ve been becoming ever larger, especially during the past 12 months. Traditionally, people have been allocating 2-3% to commodities. But we’ve been seeing in some places that now up to 5-8%. That’s one area of growth in the U.S. market for us. And naturally, there are going to be more products as we broaden our fund offerings. People will be able to allocate to different commodities in different sectors. A pension fund, for example, probably wants to hold a broadly diversified commodities ETF.

As we build our business, we’re certainly going to have more than just precious metal funds. We want to develop a one-stop shop where investors can come and find any type of commodity investment they’d like. That’s what we have in Europe, with about $12.5 billion in assets under management. We’ve got more than 130 ETFs worldwide. We firmly believe the U.S. business could be bigger than the European business.

IU: In Europe, you’re mainly focused on commodities. But you’ve also been branching into different asset classes, haven’t you?

Rhind: Yes, and it has only been within the past several months. That’s a very new business for us and represents about $200 million of our total assets. But we want to build the biggest and best business in the U.S. Right now, we’re just focused on building our commodity business in the U.S. However, we reserve the right to expand into other asset classes at some point. But for right now, we want to become the No. 1 provider of commodity ETFs in this market.

(Editor's note: This story also appears on IndexUniverse.com's sister European site here.)