Stock Market News & Stocks to Watch from StraightStocks » Northern Trust

Paul Kasriel: Waking up in recovery

Prieur du Plessis — Mon, 23 Nov 2009 08:50:35 +0000

We've made it to recovery, but it won't be quick or easy, opines Paul Kasriel, award-winning chief economist of Northern Trust. In this video (plus transcript), he takes a fresh look at the economy, the headwinds we face, and future engines for global growth.

Partisan bickering is not the solution for fostering economic growth

Prieur du Plessis — Sat, 21 Nov 2009 07:05:28 +0000

The main theme of the opinion piece by Representatives Hensarling and Ryan in the Wall Street Journal is poor economic policy choices of the current administration. "Economic history paints a very different picture from the opinion piece. Should political leaders be engaged in partisan rhetoric or in a serious discussion of how to make policy choices that will foster sustained economic growth?," asks Asha Bangalore in this guest contribution.

Maturing debt markets anchor emerging economies’ resilience, V-shaped recovery

Jason G. Wulterkens — Fri, 20 Nov 2009 03:24:23 +0000

The following appeared in the November issue of Business Diary Botswana: Despite the IMF’s recent projection that Botswana’s economy will contract 10.3% this year, the lender expects a 4.1% uptick next year such that emergency funding would not be required. Back in June the country tapped a $1.5bn “budget support loan” from the African Development [...]

Fed reduces term of discount window loans

Prieur du Plessis — Wed, 18 Nov 2009 11:03:14 +0000

This announcement by the Fed to reduce the term of discount window loans from 90 to 28 days marks the beginning of a gradual withdrawal of the extraordinary support the Fed has extended to the global financial system as signs of stability have emerged. Read on ...

Unemployment rate troubling, but …

Prieur du Plessis — Sat, 07 Nov 2009 08:28:25 +0000

This short post provides some perspective on the current state of the labor market.

DrStockPick.com Stock Report! 10/30/09, PSFT, NTRS, ANH, CTB, MFLI, PPCO

Dr. Stock Pick — Fri, 30 Oct 2009 18:31:37 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Friday October 30, 2009 DrStockPick.com Stock Report! ************************************************************** PowerSafe Technology Corporation (PSFT.PK) subsidiary Amplification Technologies Inc. (www.amplificationtechnologies.com) (ATI), is offering higher performance thermoelectrically cooled discrete amplification single photon counting solid state photodetectors. These photodetectors are mounted on a two stage thermoelectric cooler inside [...]

Recession is history, economy back in business

Prieur du Plessis — Fri, 30 Oct 2009 08:59:55 +0000

"The recession is behind us," concludes Asha Bangalore in this analysis of the latest US GDP numbers.

Market Braces for Tidal Wave of Economic Data

QualityStocks — Mon, 28 Sep 2009 18:10:36 +0000

Investors are approaching the week with “itchy trigger fingers”, according to chief investment strategist for Northern Trust, Jim McDonald. After last week’s housing and manufacturing data checked the market’s 7-month advance, the pits are wary going into a week set to be dominated by more reports on leading economic indicators. The Labor Department’s monthly report [...]

FOMC Policy Statement – nature of incoming data allow Fed to wait and watch

Prieur du Plessis — Thu, 24 Sep 2009 08:34:56 +0000

This post features brief comments by economist Asha Bangalore on the FOMC policy statement.

The shoals of depression have been avoided …

Prieur du Plessis — Tue, 15 Sep 2009 09:12:59 +0000

As mentioned before, Paul Kasriel, award-winning chief economist of Northern Trust, rates highly on my list of must-read economists. Sharing a review of the economic outlook, Paul has just published a PowerPoint presentation entitled "The shoals of depression have been avoided, but the economy still faces strong headwinds". I found it useful to flip through the slides, and I am sure you will also enjoy them.

Business cycle troughs of 1991 and 2001

Prieur du Plessis — Wed, 02 Sep 2009 10:06:41 +0000

"The trough of industrial production is roughly coincident with the troughs of business cycles. The industrial production index rose 0.5% in July 2009, following eight consecutive monthly declines. Although economic data will indicate a recovery in economic activity in the third quarter of 2009, questions about its durability will remain on the radar screen for several months," said Asha Bangalore in this guest post.

The rhyming of history – Bloomberg and the RFC

Prieur du Plessis — Fri, 28 Aug 2009 08:47:45 +0000

"If the Fed is required to publish the names of financial institutions to which it has extended credit and this publication induces financial institutions to refrain from borrowing from the Fed, one can only speculate if this would be the tinder for another liquidity conflagration in the coming months," said Paul Kasriel in this guest post.

Northern Trust Off TARP List – Analyst Blog

Zacks Market Commentaries — Thu, 27 Aug 2009 15:45:33 +0000

Northern Trust Corp. (NTRS) on Wednesday declared that it has completed the final step to free itself from the government bailout program. The Chicago-based custody bank paid $87 million to repurchase stock warrants issued to the federal government as part of the Troubled Asset Relief Program (TARP).

With this repurchase, Northern Trust has paid a total of nearly $1.71 billion to the Treasury under TARP. This includes repurchase of preferred stock issued to the government and preferred dividends. According to the bank, the total payments represent a 14% annualized return on investment to the US taxpayers.

The $700 billion bailout program was launched by the federal government to help revive deteriorating credit markets during the height of the financial crisis. The government provided capital to institutions in exchange of preferred stock and warrants to purchase common shares.

Most banks still have short-term debt guaranteed by the government. However, some large financial firms that have redeemed warrants issued under the TARP include Morgan Stanley (MS), Bank of New York Mellon Corp. (BK), Goldman Sachs (GS), U.S. Bancorp (USB), American Express Co. (AXP), BB&T Corp. (BBT) and State Street Corp. (STT).

Although Northern Trust has been healthy with respect to its balance sheet, we think there is limited room for improving its results in the near future as the market turmoil is expected to persist for a while. The shape of its bottom line will depend on near-term economic trends.

However, repayment of TARP money will bring some relief on the preferred dividend payment front. We expect the company to emerge from this testing environment and become more competitive in the long run.

Read the full analyst report on "NTRS"
Read the full analyst report on "MS"
Read the full analyst report on "BK"
Read the full analyst report on "GS"
Read the full analyst report on "USB"
Read the full analyst report on "AXP"
Read the full analyst report on "BBT"
Read the full analyst report on "STT"
Zacks Investment Research

Is US hyperinflation a clear and present danger?

Prieur du Plessis — Fri, 21 Aug 2009 08:30:26 +0000

"We hear a lot of concern that the mushroomed balance sheet of the Fed over the past two years is setting the stage for a 1970s style inflation here. So long as we have a fiat (a.k.a. Chrysler?) monetary standard, the threat of hyperinflation always lurks. But is the stage currently being set for such an eventuality? I do not think so," argues Paul Kasriel in this thought-provoking guest contribution.

Senior Loan Officer Opinion Survey – Small positives, but …

Prieur du Plessis — Tue, 18 Aug 2009 10:20:02 +0000

The US Senior Loan Officer Opinion Survey has just been published. This is an important document for assessing to what extent credit markets are thawing and confidence is returning to the financial system. The analysis presented in this post is a guest contribution by Asha Bangalore of Northern Trust.

Tracking a few of the Fed’s extraordinary programs

Prieur du Plessis — Fri, 31 Jul 2009 09:32:51 +0000

In this guest contribution, Asha Bangalore concludes: "There is sufficient room under the provisions of current programs to provide support for the working of the financial system, and the Fed, as implied in the minutes of the June meeting and testimony by Bernanke, is currently focused on promoting growth and designing a suitable exit strategy."

Picture du Jour: US housing – better days ahead?

Prieur du Plessis — Wed, 29 Jul 2009 10:15:41 +0000

It would seem that the US housing market - arguably the Achilles heel of the global financial morass - is finally looking up. Confirmation of better tidings for housing also comes from the stock market in the form of a monthly chart of the Philadelphia Housing Index.

Exit strategy – a deft and fortunate Fed?

Prieur du Plessis — Wed, 22 Jul 2009 08:48:25 +0000

Chairman Bernanke yesterday outlined the exit plan of the Fed in his testimony and in a Wall Street Journal article. In this guest post, Asha Bangalore comments on whether the Fed will be able to unwind the massive stimulus.

Paul Kasriel: Coming out of a downturn

Prieur du Plessis — Wed, 15 Jul 2009 05:10:18 +0000

As we see glimmers of an exit from the recession, Paul Kasriel, chief economist at Northern Trust, examines evidence to answer the question "Is the Worst Over?"

Increase in the Fed’s balance sheet – let’s be objective

Prieur du Plessis — Fri, 03 Jul 2009 06:46:03 +0000

"The point I am attempting to make in this commentary is that the increase in the balance sheet of the Fed in the past year is not currently inflationary and need not lead to higher future inflation," argues economist Paul Kasriel in this quest blog.

Social Security: The Biggest Ponzi Scheme You Don’t Know About

Contrarian Profits — Tue, 30 Jun 2009 19:27:13 +0000

pYesterday, the mainstream media whooped and shrieked over the tough sentence handed down to swindler Bernie Madoff. “Madoff got what he deserved,” wrote the columnists. “Mr Madoff’s crimes were extraordinarily evil,” said Judge Denny Chin, who also told the jury that Madoff’s pyramid scheme was “staggering” and “off the chart.”/p pNobody seemed particularly interested in the far greater scam being pulled off on a daily basis by the US government (a scam that, incidentally, pays for Judge Chin’s salary and Madoff’s stay in the “big house”)./p pBut it’s clear to us here at emNotes/em at least that the government’s $15 billion a day borrowing habit dwarfs Madoff’s $65 billion Ponzi scheme./p pAs of June 18 2009, total US federal debt was $11,342,734,351,973 - or about $36,989#8230;/p

Words from the (investment) wise for the week that was (June 22 – 28, 2009)

Prieur du Plessis — Sun, 28 Jun 2009 08:37:06 +0000

“Words from the Wise” this week comes to you in a shortened format as I do not have access to my normal research resources while on the road in Europe. Although very little commentary is provided, a full dose of excerpts from interesting news items and quotes from market commentators is included.

Kasriel: How does an excess supply get remedied?

Prieur du Plessis — Thu, 18 Jun 2009 08:51:22 +0000

"It is well documented that the prices of houses have plummeted. What may be less well known is that newly-started production of single-family homes has come back into equilibrium with the sales of new single-family homes," said Paul Kasriel in this interesting guest contribution.

Evaluating housing on a relative-yield basis

Prieur du Plessis — Mon, 15 Jun 2009 04:29:31 +0000

"The higher relative implicit yield on owner-occupied housing is yet one more positive element arguing in favor of the bottoming of housing demand," argues Paul Kasriel in this quest post. Read on for his methodology and some interesting graphs.

Stock Market News for June 10, 2009 – Market News

Zacks Market Commentaries — Wed, 10 Jun 2009 14:03:07 +0000

Asian stock markets recorded sharp gains Wednesday, helped by a jump in commodity prices and hopes that the U.S. banking system is showing sings of buoyancy. In Tokyo, the Nikkei 225 stock average jumped 2.1% to 9,991.49 and the Hang Seng index in Hong Kong surged more than 4% to close at 18,785.66. Japanese investors shrugged off a report that suggested core machinery orders, a closely watched indicator of corporate capital spending, plunged to a 22-year low in April. South Korea's benchmark Kospi jumped 3.1% and India's Sensex added 2.3%.

Yesterday, Wall Street responded with a yawn to Obama Administration's announcement that 10 of the largest banks could repay $68 billion of government bailout cash. Although Treasury Secretary Geithner, appearing before the Senate Appropriations Committee, noted the repayment of the bailout money was a sign of "financial repair," stocks swung back and forth in a narrow range, signaling the much-expected announcement from the Treasury packed few surprises. Technology stocks, buoyed by Texas Instruments' (NYSE:TXN) better-than-expected earnings and sales outlook, pushed Nasdaq higher while the Dow Jones Industrial Average and broad based S&P 500 index ended the day mixed. The Tech-heavy Nasdaq rose 17.73 points, or 0.96%, to close at 1860.13. The DJIA slipped about 0.1% to close at 8,763.06. The S&P added 0.4% to close at 942.43.

Some big financial institutions have been eager to escape increased federal involvement and the restrictions that come with being part of the Troubled Asset Relief Program. Although the Treasury did not name the banks cleared to pay back the TARP funds, the ten institutions quickly confirmed they have been allowed to exit the government's financial assistance program. Morgan Stanley (NYSE:MS), American Express (NYSE:AXP), JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), Bank of New York Mellon (NYSE:BK), BB&T (NYSE:BBT), Capital One (NYSE:COF), Northern Trust (NASDAQ:NTRS), State Street (NYSE:STT) and US Bancorp (NYSE:USB) were cleared to pay back the rescue funds. Commenting on the move, JP Morgan Chase & Co (NYSE:JPM) CEO Jamie Dimon noted, "Paying back TARP at this time is the right thing for JPMorgan Chase, and it's the right thing for our country." Financial sector shares edged up 0.4%, with American Express (NYSE:AXP) topping the list of gainers on the DJIA with a 5% jump, as traders were relieved that the industry's rising rates of card delinquencies and the potential for increased attendant loan losses had not prevented government approval of its repayments.

Following Texas Instruments' (NYSE:TXN) improved guidance, semiconductor shares rallied with Advanced Micro Devices (NYSE:AMD) closing up 3.1%, Intel (NASDAQ:INTC) rising 3.4%, and National Semiconductor (NYSE:NSM) closing up 4.4%. According to a Bank of America (NYSE:BAC) analyst note, Microchip Tech (NASDAQ:MCHP) has been witnessing improved China orders. BofA raised its price target on the company to $23.

Crude prices went beyond $70 per barrel on hopes a stronger economy will lift demand. Dollar prices continued to remain under pressure. Although concerns linger over the state of the world economy, commodities have recorded sharp gains recently as investors have increasingly turned towards crude to hedge against a weak dollar. Yesterday's $35 billion auction of 3-year Treasuries met with strong demand, however, as a yield of 1.96% topped expectations, and the bid-to-cover ratio equaled 2.8%. Today's calendar is for $19 billion in 10-year notes, with $11 billion 30-years slated for tomorrow. However, investors remain concerned that rising short-term interest rates will squeeze banking industry's net interest margins, in a sector that has already seen a 73% price run-up over the past three months.

Meanwhile, late Tuesday, the Supreme Court rejected an appeal from three Indiana state funds, consumer groups and others, clearing the way for the sale of most of Chrysler's assets to Italy's Fiat Group SpA.

Afternoon sentiment will reflect release of the Fed's latest take on regional economic conditions, revealed in its Beige Book at 2:00 AM ET. The report is likely to recount the well-aired areas of economic weakness, namely, depressed housing markets, soft consumer demand, deteriorating employment opportunities, and downward price pressures. Indications of an economic recovery's "green shoots" of growth may help boost sentiment.

Zacks Investment Research

Why are other yields falling as Treasury yields rise?

Prieur du Plessis — Wed, 10 Jun 2009 07:59:02 +0000

"There is a lot in the press these days about how the recent rise in Treasury bond yields has the potential to abort a nascent economic recovery. To this I say, nonsense!," said Paul Kasriel in this short guest contribution.

Tuesday’s Market Recap (06/09/09)

Bullish Bankers — Tue, 09 Jun 2009 22:53:13 +0000

The markets were very volatile today, with a late rally sending the indexes near where they opened. The Dow Jones was the only major index down, closing at 8763.06 down 0.02%. The NASDAQ and S&P were both up closing at 1860.13 and 942.43 respectively, up 0.96% and 0.35%. The 10-year saw prices fall as the yield ended at 3.862%. [...]

First Wave of TARP Repays – Analyst Blog

Zacks Market Commentaries — Tue, 09 Jun 2009 21:14:11 +0000

First Wave of TARP Repays (& Hopefully Not the Last)

Earlier today, the Treasury Department gave approval for a 10 of the 19 largest financial institutions to be able to repay the Troubled-Asset Relief Program (TARP) funds received over the past 11 months as a result of the financial crisis.

Of the 10 institutions that received permission to repay TARP fund, eight passed the government's "stress tests" announced last month -- JPMorgan Chase (JPM), American Express (AXP), Goldman Sachs (GS), U.S. Bancorp (USB), Capital One (COF), Bank of New York Mellon (BK), State Street (STT) and BB&T (BBT). Even though Morgan Stanley (MS) did not pass the stress test, the company was able to quickly raise enough capital to receive permission to repay its bailout fund share. While Northern Trust (NT) was not among the 19 banks required to undergo a stress test, it received permission to repay the bailout funds.

In total ,these institutions will repay $68 billion in funds, or only close to 10% of the total funds allocated. We would note 22 smaller institutions have already repaid the funds they received, bring the total to about $70 billion.

President Obama was positive on the "initial return on a few of these investments," as dividend payments received for all TARP participants total approximately $4.5 billion to date, based on information from the Treasury. The preferred stock dividends paid were about $1.8 billion over the last seven months, and the value of the warrants for banks permitted to repay TARP funds are in the "several billion dollar range" as per Treasury Secretary Timothy Geithner.

While this news is somewhat positive, it does not mean that the problems with our economy or our banking system and the overall crisis are behind us.

The repayment of TARP funds obscures the problems within the broader banking industry -- large banks continue to hold the "toxic mortgage-backed assets" that created the financial crisis, and smaller institutions still have billions in risky commercial real estate loans.

While the government asserts that it should receive investment returns from the warrants attached to the preferred stock, which would allow it to buy shares of the banks at a set price over the next 10 years, three of the nation's biggest banks -- Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC) have not received permission to return funds yet. As for AXP and USB, their repayments should result in reduced earnings for 2Q09.

Overall, even if there is repayment of TARP funds, these institutions still dependent on government support, such as debt guarantees from the Federal Deposit Insurance Corp. and credit lines from the Federal Reserve.

Considering that we have yet to see a bottom in the current banking crisis (unemployment continues to rise, which could result in more losses on loans and new bank failures), the rationale for letting these institutions return capital could wind up to be a short-sighted resolution, and could cause the need for the government to come to the rescue yet again.

But at least executive compensation schemes at these institutions can resume for the time being.
Read the full analyst report on "JPM"
Read the full analyst report on "AXP"
Read the full analyst report on "GS"
Read the full analyst report on "USB"
Read the full analyst report on "COF"
Read the full analyst report on "BK"
Read the full analyst report on "STT"
Read the full analyst report on "BBT"
Read the full analyst report on "MS"
Read the full analyst report on "NT"
Zacks Investment Research

ETF Stats For May 2009

ETF Daily News — Mon, 01 Jun 2009 14:56:48 +0000

The month of May brought the largest monthly decline ever in the number of US-listed ETFs and ETNs. Active listings changed by -14 after averaging more than +17 new products per month during the past three calendar years. Additionally, the six-month moving average of net new listings turned negative for the first time in history. There [...]

Credit Crisis Watch: Thawing – noteworthy progress

Prieur du Plessis — Tue, 19 May 2009 02:36:43 +0000

Most indications are that the credit market tide has turned the corner on the back of the massive reflation efforts orchestrated by central banks worldwide and that the credit system has started thawing. However, although the convalescence process seems to be well on track, it still has a way to go before confidence in the financial system is restored and liquidity starts to move freely again. Read on for an update on the "Credit Crisis Watch" ...

Words from the (investment) wise for the week that was (May 11 – 17, 2009)

Prieur du Plessis — Sun, 17 May 2009 08:32:46 +0000

A long-awaited reversal in the monumental global stock market rally since early March finally arrived last week. “Less bad” economic reports provided investors with little comfort, sparking a reassessment of their risk appetite and leading to profit-taking on most bourses. On the other hand, safe-haven assets attracted buying. Read all about this and the implications for financial markets in the weekly “Words from the Wise” review.

Words from the (investment) wise for the week that was (May 4 – 10, 2009)

Prieur du Plessis — Sun, 10 May 2009 08:16:00 +0000

As investors welcomed the less-than-feared stress-test results and their hopes for an early economic recovery mounted, they drove up the prices of risky assets such as equities and commodities. However, traditional safe havens like developed-market government bonds and the US dollar experienced selling pressure. Read all about this and the implications for financial markets in the weekly “Words from the Wise” review.

Senior Loan Officer Opinion Survey – credit conditions are improving

Prieur du Plessis — Tue, 05 May 2009 08:34:36 +0000

Words from the (investment) wise for the week that was (April 27 – May 3, 2009)

Prieur du Plessis — Sun, 03 May 2009 08:11:27 +0000

"Goodbye safe havens, hello risky assets." This was the refrain of investors' theme song during the past week. Safe-haven assets were out of favor as better-than-feared corporate earnings and signs of a budding economic recovery emboldened investors' appetite for reflation trades such as equities and commodities. Read all about this and the implications for financial markets in the weekly "Words from the Wise" review.

Paul Kasriel: Preferred equity into common equity – accounting alchemy?

Prieur du Plessis — Thu, 30 Apr 2009 07:36:07 +0000

"Treasury's plan to enhance the capitalization of some financial institutions by beating preferred equity shares into common equity shares is accounting alchemy," said Paul Kasriel. This guest posts provides his motivation.

Words from the (investment) wise for the week that was (April 20 – 26, 2009)

Prieur du Plessis — Sun, 26 Apr 2009 13:43:00 +0000

The mood of investors was influenced last week by the stress test debate, tentative signs of economic stabilization in a number of countries and a barrage of earnings report – generally better than feared. As the equity rally ground to a halt on some bourses, the US dollar and government bonds offered little safety appeal and edged weaker. Read all about this and the implications for financial markets in the weekly “Words from the Wise” review.

Words from the (investment) wise for the week that was (April 13 – 19, 2009)

Prieur du Plessis — Sun, 19 Apr 2009 08:31:44 +0000

Spring is in the air – at least in the Northern Hemisphere and on global bourses. Last week marked the sixth consecutive up-week for stock markets as the risk appetite of investors returned amid signs of global economies and the financial sector embarking on the road to recovery. Read all about this and the implications for financial markets in the weekly "Words from the Wise" review.

Who Might Buy iShares?

Matt Hougan — Tue, 17 Mar 2009 05:54:12 +0000

A lot of people called me yesterday to ask who might buy iShares. The short answer is, I don't know. But like everyone, I can't help but speculate.

I know my more serious colleagues—Jim Wiandt and Murray Coleman—will accuse me of falling short of the desired journalistic reserve. To that, I plead guilty. The list of potential suitors I lay out below is rank speculation, based on nothing more than my intuition about the industry and a few silly hunches.

But the fact that Barclays is shopping iShares around is big news in the ETF industry. There are important ramifications. And besides, this is a blog, and if I can't speculate here ...

So let's get it out of the way. Here is my list of potential suitors. This is borrowed from my own speculation, and that reported by John Spence and others in the media yesterday:

Big Broker-Dealers: Goldman Sachs, J.P. Morgan, Morgan Stanley
Big Banks: State Street, Deutsche Bank, Northern Trust
Brokers: Charles Schwab
Fund Companies: Fidelity

There are a dozen more options, including private equity firms, but those are some of the hot names.

Make no mistake: iShares would be a jewel for any of them. It controls 46% of all ETF industry assets, including six of the top 10 funds. Its iShares MSCI Emerging Markets ETF (NYSE Arca: EEM) is the second-highest grossing ETF in the world, pulling in over $110 million per year; only the SPDR Gold Shares (NYSE Arca: GLD) does better, grossing $125 million. And it sits at the heart of one of the fastest-growing segments of the financial services industry.

Whoever buys iShares, assuming it's sold, I hope for one thing: They continue pouring money and effort into educating investors about ETFs. The ETF industry has been built in large part on the outreach efforts of iShares, and it would be a shame to lose that.

Global Recession Puts Golf Industry Deep in the Rough

Don Miller — Mon, 23 Feb 2009 12:00:08 +0000

pThe global economic meltdown has struck golf industry, dragging on tourism and travel, delaying golf course construction, and curbing club membership rolls./p pNow, even the crown jewels of the sport – the a href="http://www.pga.com/" target="_blank"Professional Golfers Association/a (PGA) and a href="http://www.lpga.com/" target="_blank"Ladies Professional Golfers Association/a (LPGA) – have been tarnished by financial scandal and sponsorship defections/p pThe most recent scandal to hit Wall Street had PGA Tour players concerned about more than just tournament highlights as they teed off Thursday at the a href="http://www.northerntrustopen.com/" target="_blank"Northern Trust Open/a at a href="http://www.therivieracountryclub.com/html/index.cfm" target="_blank"Riviera Country Club/a in Los Angeles./p pMany tour members at Riviera were struggling to comprehend the potential implications of the financial scandal involving tournament sponsor a href="http://www.stanfordfinancial.com/" target="_blank"Stanford Financial Group/a, and that company’s chairman, a href="http://en.wikipedia.org/wiki/Allen_Stanford" target="_blank"Robert Allen Stanford/a./p pAs reported by strongemMoney Morning/em/strong on Friday, the a href="http://www.sec.gov/" target="_blank"U.S. Securities and Exchange#8230;/a/p

Dolan Sees More Use Of Sector ETFs In Place Of Stocks

IndexUniverse Staff — Thu, 05 Feb 2009 00:37:29 +0000

Better times for investors won't necessarily lead to less use of sector ETFs, says Select Sector SPDRs' director.

Dan Dolan is director of wealth management strategies for Select Sector SPDRs. Previously, he spent 18 years at Merrill Lynch in a variety of research and management roles. In 2003, Dolan left Merrill to join Alps Distributors to focus on the Select Sector SPDRs operations.

On Wednesday, he discussed recent market changes and the future of sector exchange-traded funds with IndexUniverse.com Managing Editor Murray Coleman.

IU: You started 2008 with $25.9 billion in assets and finished the year with $23.2 billion. Was that a disappointment?

Dolan: We were up 521.6 million shares in 2008. That represented a 77% increase in shares outstanding. In terms of trading volume, our average for all nine Select Sector SPDRs was 260 million shares a day. That was up from 90 million in 2007 and 45 million in 2006.

IU: Most of last year's decrease in assets was related to market depreciation?

Dolan: Yes. We had a great year up until the fourth quarter. The trading volume, shares outstanding and interest in Select Sector SPDRs was all great. But our ETFs are made up of the S&P 500 stocks. And XLF is the biggest of the group, even though Financials were down 55% for the year.

IU: What changed the most for you in the past year?

Dolan: The institutional use of the products continues to evolve. Whereas most ETFs are used as mutual fund substitutes, a lot of the sector-based products are being used as stock substitutes. Many institutional investors are opting for taking a basket of stocks rather than taking the risks of using individual stocks.

IU: Will that change once markets improve?

Dolan: I'll take any improvement in the market and see. The more we see unexpected announcements by companies about hits in off-balance-sheet activities, this lack of corporate trust is going to be with us.

IU: Are Select Sector SPDRs more of a trading tool then?

Dolan: Clearly when you have the volume of 260 million a day, some are using it as a trading vehicle. But others clearly aren't. They're trying to take advantage of some investment theme. And the short side of the market is pretty active right now as well. Trying to decide which stock to short is difficult. We have about 230 million shares outstanding on the short side right now. And we're seeing more and more of it.

IU: Should Select Sector SPDRs be considered a part of State Street Global Advisors' ETF lineup?

Dolan: Sector SPDRs are advised by SSgA. It really started with a partnership in 1998 between Merrill Lynch, State Street and the Amex. The idea came out of Merrill, where I worked. The indexes are controlled by Merrill Lynch. The assets are managed by State Street and the sales responsibility is Alps.

IU: State Street has, for example, a Telecom ETF. So from an investor's standpoint, what's the difference?

Dolan: The Sector SPDRs Trust consists of nine ETFs which divide the S&P 500 into pieces. There are no stocks in the Sector SPDRs that are outside the S&P 500. Since that time, others have introduced finer slices of the market where industries are rolled up into sectors. We only have nine sector SPDRs because the 10^th S&P sector only has nine stocks. You can't make an ETF with that small of a number. So we decided to roll those nine stocks into Technology because they have a very high correlation to each other.

IU: You've just cut expense ratios on all nine Sector SPDRs, haven't you?

Dolan: Those changes became effective on Jan. 31. When we launched them in 1998, their expense ratios were each at 65 basis points. As assets have grown, we've continued to lower expenses for everyone. Even though last year was brutal, we were able to shave fees on various administrative and marketing costs to drive expenses lower. Going from 23 to 21 basis points might not seem like much, but it represents an 8.6% reduction. On the other side, Vanguard moved its expense ratios in the sector space higher, from 22 to 25 basis points.

IU: What areas of expansion are you exploring?

Dolan: We've stuck to our main focus. And it has served us well. In December 1998, there weren't even 20 ETFs on the market. In fact, Northern Trust just announced they were going to close their 17 NETS. In the mid-1990s, Deutsche Bank launched a whole series of country-specific ETFs. And they closed within a year, if I remember correctly. So to launch nine in the late ‘90s was a significant event back then in the ETF world. And our assets have steadily grown. We had about $4 billion in assets to start 2003. Our high watermark was four months ago, when we had over $35 billion. So it has been a great ride.

IU: How do you view the competitive landscape?

Dolan: We were the first mover in sector ETFs. Then iShares came out with their series of sector products. Vanguard followed and now PowerShares has two sector ETFs. In the last couple of years, ProShares and Rydex have come out with leveraged sector products. According to a recent Morgan Stanley report, there are 152 pure sector and industry ETFs on the market now. And that's not even including the leveraged and inverse products. But we were the first and still the largest by far.

Credit Crisis Watch: Some Positive Developments

Prieur du Plessis — Wed, 04 Feb 2009 08:36:10 +0000

For the global financial system to start functioning normally again, it is imperative that confidence in the credit markets be restored. This post is an update on the "Credit Crisis Watch", showing that the tide seems to be turning in the process of un...

Jan. 30: The Best ETF Articles In The National Media

IndexUniverse Staff — Fri, 30 Jan 2009 20:00:36 +0000

Bidders Avoid T-Bill Auction

The latest government auction of five-year Treasuries didn't go well on Thursday, reports Forbes, as impatient investors seem to be demanding the Fed step in and start buying long-term issues to help the skidding economy.

The piece looks at the fallout from the auction on exchange-traded funds focused on Treasuries.

You can read the story here.

GLD Soars To New High

The amount of gold in the SPDR Gold Trust (NYSE: GLD) increased 1.3% to 843.59 metric tons, a three-month high, reports Bloomberg News.

Silver reached a four-month high. You can read the story here.

Nusbaum Sees ETFs Evolving

In his regular column for TheStreet.com, Roger Nusbaum considers Northern Trust's exit from ETFs and the two new iPaths coming out to track the VIX.

His conclusion: ETFs will continue to evolve as investors learn how to better utilize all of the choices being made available to them for portfolio construction.

See his column here.

Earnings Preview for Jan 19-23 – Earnings Preview

Charles Rotblut — Fri, 16 Jan 2009 00:00:00 +0000

NetScout Systems, Inc. (NTCT) could top expectations. Burlington Northern Santa Fe Corporation (BNI) and General Electric Company (GE) could miss estimates.

The U.S. equity markets will be closed on Monday, Jan 19, in observance of Martin Luther King, Jr. Day. The markets will be open on Tuesday, Jan 20, though volume could be light because of the inauguration.

This will be the first busy week of fourth-quarter earnings season, with 149 companies scheduled to report. Large-cap stocks will dominate the news with 53 S&P 500 members releasing results. Dow components will include General Electric Company (GE), International Business Machines (IBM), Johnson & Johnson (JNJ), Microsoft (MSFT) and United Technologies Corporation (UTX).

The economic calendar is very light.

Wednesday: Weekly crude inventories
Thursday: December housing starts, December building permits, weekly initial jobless claims

No Fed officials are scheduled to give speeches. The Fed will hold a 2-day meeting starting on Jan 27.

Companies That Could Issue Positive Earnings Surprises

NetScout Systems, Inc. (NTCT) recently raised its fiscal third-quarter guidance. Citing strong demand from wireless carriers and growth in other markets, the company now anticipates having earned between 16 cents and 18 cents per share. Half of the 4 covering analysts raised their forecasts in response, pushing the consensus earnings estimate 5 cents higher to 16 cents per share. The most accurate estimate is far more bullish at 22 cents per share. NTCT has topped expectations for 4 consecutive quarters. NetScout is scheduled to report on Thursday, Jan 22, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Profit forecasts for Burlington Northern Santa Fe Corporation (BNI) have been falling lately, with 6 brokerage analysts reducing their fourth-quarter projections during the last 30 days. Though the railroad company does have a history of topping expectations, a recent warning from a competitor could end the streak. The consensus earnings estimate calls for fourth-quarter profits of $1.78 per share. The most accurate estimate is more bearish at $1.75 per share. Burlington Northern Santa Fe Corporation is scheduled to report on Wednesday, Jan 21, before the start of trading.

General Electric Company (GE) reaffirmed its fourth-quarter EPS guidance of 50 to 52 cents per share in mid-December. Since that time, 5 brokerage analysts have cut their quarterly projections. The negative revisions caused the consensus earnings estimate to fall to 44 cents per share. The most accurate estimate is more bearish at 42 cents per share. The conglomerate has missed once in the past 3 quarters. General Electric Company is scheduled to report on Friday, Jan 23, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Surprise Trader can help you turn earnings surprises into quick profits. Learn how.

Earnings Calendar

Here is a list of companies that we have confirmed will report during the week of Jan 19 - 23¹. Prices are as of Thursday's, Dec 18, market close.

Company	Ticker	Zacks Consensus Estimate	Year Ago Actual	Last Qtr Surprise	Report Date	Report Time	Price
First Defiance	FDEF	$0.30	$0.50	(34.8%)	1/19/2009	AMC	$8.00
Fuller(Hb) Co	FUL	$0.24	$0.53	0.0%	1/19/2009	N/A	$14.19
Logitech Intl	LOGI	$0.44	$0.71	(15.8%)	1/19/2009	AMC	$13.75
Macatawa Bank	MCBC	($0.15)	($0.16)	37.5%	1/19/2009	AMC	$2.50
S&T Bancorp Inc	STBA	$0.57	$0.54	(9.5%)	1/19/2009	BTO	$30.51
Candela Corp	CLZR	($0.17)	($0.13)	(350.0%)	1/20/2009	AMC	$0.48
Capital Bank	CBKN	$0.14	$0.13	(10.0%)	1/20/2009	N/A	$6.50
Commerce Bancsh	CBSH	$0.62	$0.74	(8.5%)	1/20/2009	BTO	$37.82
Cree Inc	CREE	$0.10	$0.08	0.0%	1/20/2009	AMC	$16.98
Csx Corp	CSX	$0.90	$0.85	(2.2%)	1/20/2009	AMC	$30.18
Fastenal	FAST	$0.41	$0.38	4.0%	1/20/2009	BTO	$33.20
Forest Labs A	FRX	$0.76	$0.96	15.9%	1/20/2009	BTO	$26.00
Fulton Finl	FULT	($0.55)	$0.22	(8.7%)	1/20/2009	AMC	$8.05
Hancock Hldg Co	HBHC	$0.57	$0.60	(24.2%)	1/20/2009	AMC	$35.85
Iberiabank Corp	IBKC	$0.72	$0.81	(2.5%)	1/20/2009	AMC	$41.22
Intl Bus Mach	IBM	$3.03	$2.80	0.5%	1/20/2009	AMC	$84.12
Jefferies Gp-Nw	JEF	($2.38)	($0.17)	(216.7%)	1/20/2009	BTO	$12.67
Johnson & Johns	JNJ	$0.92	$0.88	5.4%	1/20/2009	BTO	$57.62
New Oriental Ed	EDU	$0.07	$0.10	7.3%	1/20/2009	BTO	$54.47
Omnova Solution	OMN	$0.09	$0.09	33.3%	1/20/2009	BTO	$0.66
Pacific Contl	PCBK	$0.27	$0.28	(7.4%)	1/20/2009	AMC	$12.32
Packaging Corp	PKG	$0.26	$0.46	(7.3%)	1/20/2009	AMC	$13.37
Parker Hannifin	PH	$0.85	$1.23	7.1%	1/20/2009	BTO	$39.77
Petmed Express	PETS	$0.20	$0.18	25.0%	1/20/2009	BTO	$16.43
Raymond Jas Fin	RJF	$0.35	$0.47	5.4%	1/20/2009	AMC	$16.26
Regions Finl Cp	RF	($0.02)	$0.24	(46.4%)	1/20/2009	BTO	$6.10
State St Corp	STT	$1.16	$1.38	3.3%	1/20/2009	BTO	$38.00
Suncor Energy	SU	$0.39	$0.66	0.0%	1/20/2009	BTO	$21.11
Supertex Inc	SUPX	$0.20	$0.26	6.1%	1/20/2009	AMC	$21.65
Td Ameritrade	AMTD	$0.31	$0.40	(3.3%)	1/20/2009	BTO	$12.63
Tessco Tech Inc	TESS	$0.33	$0.29	N/A	1/20/2009	AMC	$10.35
West Cst Bcp/Or	WCBO	($0.09)	($0.49)	140.0%	1/20/2009	N/A	$4.39
Westell Tech-A	WSTL	($0.05)	($0.04)	22.2%	1/20/2009	AMC	$0.28
Woodward Govnr	WGOV	$0.38	$0.36	0.0%	1/20/2009	AMC	$21.06
Abbott Labs	ABT	$1.06	$0.93	2.6%	1/21/2009	BTO	$49.22
Actions Semicon	ACTS	$0.05	$0.23	(10.0%)	1/21/2009	AMC	$1.40
Adtran Inc	ADTN	$0.28	$0.27	0.0%	1/21/2009	BTO	$14.84
Air Prods & Che	APD	$0.98	$1.16	0.8%	1/21/2009	BTO	$56.07
Allegheny Tech	ATI	$0.89	$1.45	5.1%	1/21/2009	BTO	$25.55
Amdocs Ltd	DOX	$0.50	$0.50	(14.3%)	1/21/2009	AMC	$19.42
Amr Corp	AMR	($0.65)	($0.74)	4.8%	1/21/2009	BTO	$10.98
Blackrock Inc	BLK	$1.13	$2.52	(16.6%)	1/21/2009	BTO	$116.67
Burlngtn Nsf Cp	BNI	$1.78	$1.46	12.4%	1/21/2009	BTO	$63.37
Celadon Group	CLDN	$0.07	$0.08	8.3%	1/21/2009	AMC	$8.10
Charlotte Russe	CHIC	$0.11	$0.56	(93.3%)	1/21/2009	AMC	$4.74
Cnh Global Nv	CNH	$0.69	$0.50	36.3%	1/21/2009	AMC	$14.86
Coach Inc	COH	$0.67	$0.69	0.0%	1/21/2009	BTO	$16.81
F5 Networks Inc	FFIV	$0.26	$0.21	28.6%	1/21/2009	AMC	$23.20
Hudson City Bcp	HCBK	$0.27	$0.16	0.0%	1/21/2009	BTO	$13.16
Igate Corp	IGTE	$0.14	$0.09	15.4%	1/21/2009	BTO	$6.50
Kinder Morg Eng	KMP	$0.54	$0.53	(18.6%)	1/21/2009	AMC	$47.57
Labranche & Co	LAB	$0.17	$0.04	0.0%	1/21/2009	BTO	$5.68
Mcmoran Explor	MMR	($0.32)	$0.31	21.5%	1/21/2009	BTO	$8.79
Mts Systems	MTSC	$0.49	$0.47	26.9%	1/21/2009	AMC	$25.96
Noble Corp	NE	$1.50	$1.35	5.1%	1/21/2009	AMC	$21.44
Northern Trust	NTRS	$0.96	$0.97	(31.8%)	1/21/2009	BTO	$48.28
Nve Corp	NVEC	$0.40	$0.36	17.1%	1/21/2009	AMC	$23.66
Polycom Inc	PLCM	$0.32	$0.28	0.0%	1/21/2009	AMC	$14.02
Popular Inc	BPOP	($0.37)	($0.23)	39.7%	1/21/2009	BTO	$4.89
Precision Castp	PCP	$1.70	$1.73	(1.6%)	1/21/2009	BTO	$54.68
Progressive Cor	PGR	$0.35	$0.34	(412.1%)	1/21/2009	N/A	$13.99
Sanmina-Sci Cp	SANM	$0.01	$0.02	0.0%	1/21/2009	AMC	$0.38
Seagate Tech	STX	($0.03)	$0.76	13.0%	1/21/2009	AMC	$4.33
Somanetics Corp	SMTS	$0.23	$0.19	15.0%	1/21/2009	BTO	$16.31
Ual Corp	UAUA	($4.03)	($0.47)	17.8%	1/21/2009	BTO	$11.14
Us Bancorp	USB	$0.27	$0.66	(37.3%)	1/21/2009	BTO	$19.02
Utd Techs Corp	UTX	$1.23	$1.08	3.0%	1/21/2009	BTO	$49.69
Wipro Ltd-Adr	WIT	$0.14	$0.14	0.0%	1/21/2009	N/A	$7.19
Adv Micro Dev	AMD	($0.53)	($0.17)	132.5%	1/22/2009	AMC	$2.26
Amcore Finl Inc	AMFI	($0.30)	$0.33	(777.8%)	1/22/2009	BTO	$3.35
Amer River Bsh	AMRB	$0.33	$0.36	2.9%	1/22/2009	BTO	$9.90
Amerisourcebrgn	ABC	$0.69	$0.62	4.3%	1/22/2009	BTO	$36.85
Assoc Banc Corp	ASBC	$0.32	$0.55	2.8%	1/22/2009	N/A	$16.12
Au Optroncs-Adr	AUO	($0.53)	$1.24	47.4%	1/22/2009	BTO	$7.20
Avnet	AVT	$0.66	$0.89	(5.6%)	1/22/2009	BTO	$17.91
Avx Corp	AVX	$0.09	$0.22	0.0%	1/22/2009	BTO	$7.71
Bancorpsouth	BXS	$0.31	$0.39	(20.9%)	1/22/2009	AMC	$18.81
Bank Of Ny Mell	BK	$0.68	$0.67	43.6%	1/22/2009	BTO	$23.27
Baxter Intl	BAX	$0.89	$0.76	7.3%	1/22/2009	BTO	$53.56
Bb&T Corp	BBT	$0.53	$0.75	(3.0%)	1/22/2009	BTO	$20.99
Brinker Intl	EAT	$0.19	$0.31	0.0%	1/22/2009	BTO	$9.42
Cabot Microelec	CCMP	$0.06	$0.51	(21.7%)	1/22/2009	BTO	$22.33
Capital One Fin	COF	$0.39	$0.90	6.2%	1/22/2009	AMC	$25.47
Cdn Natl Ry Co	CNI	$0.85	$0.91	6.2%	1/22/2009	AMC	$34.45
Cit Group Inc	CIT	($0.39)	($0.69)	(11.8%)	1/22/2009	BTO	$3.24
City National	CYN	$0.62	$0.96	(11.0%)	1/22/2009	AMC	$37.08
Cobiz Finl Inc	COBZ	$0.16	$0.23	0.0%	1/22/2009	AMC	$7.89
Columbus Mckinn	CMCO	$0.41	$0.53	(11.3%)	1/22/2009	BTO	$13.04
Comerica Inc	CMA	$0.26	$0.77	57.1%	1/22/2009	BTO	$14.60
Commnty Bk Sys	CBU	$0.37	$0.39	0.0%	1/22/2009	AMC	$21.37
Cubist Pharm	CBST	$0.51	$0.16	29.4%	1/22/2009	AMC	$22.66
Cypress Semicon	CY	($0.31)	$0.10	(312.5%)	1/22/2009	BTO	$4.75
Deluxe Corp	DLX	$0.68	$0.77	(6.9%)	1/22/2009	BTO	$13.12
Digi Intl Inc	DGII	$0.03	$0.14	55.6%	1/22/2009	AMC	$7.47
Exelon Corp	EXC	$1.06	$1.02	(6.1%)	1/22/2009	BTO	$53.04
Ezcorp Inc Cl A	EZPW	$0.35	$0.29	0.0%	1/22/2009	AMC	$14.19
Federated Invst	FII	$0.51	$0.52	1.8%	1/22/2009	AMC	$18.26
Fifth Third Bk	FITB	$0.03	$0.07	(119.1%)	1/22/2009	BTO	$5.38
First Comw Finl	FCF	$0.16	$0.16	(22.2%)	1/22/2009	BTO	$10.17
First Finl Hldg	FFCH	$0.42	$0.36	8.0%	1/22/2009	BTO	$18.70
Franklin Resour	BEN	$0.86	$2.12	(12.2%)	1/22/2009	BTO	$52.97
Google Inc-Cl A	GOOG	$4.23	$3.79	3.9%	1/22/2009	AMC	$298.99
Huntington Banc	HBAN	$0.20	($0.65)	27.3%	1/22/2009	BTO	$4.29
Imation Corp	IMN	$0.13	$0.64	0.0%	1/22/2009	BTO	$12.96
Interactive Brk	IBKR	$0.54	$0.46	6.6%	1/22/2009	AMC	$18.08
Intl Game Tech	IGT	$0.27	$0.36	(9.7%)	1/22/2009	BTO	$12.45
Intuitive Surg	ISRG	$1.31	$1.24	13.4%	1/22/2009	AMC	$100.68
Itt Educational	ESI	$1.44	$1.20	11.3%	1/22/2009	BTO	$111.81
Janus Cap Grp	JNS	$0.05	$0.33	(7.7%)	1/22/2009	BTO	$6.74
Kelly Svcs A	KELYA	$0.12	$0.54	(74.1%)	1/22/2009	BTO	$11.92
Keycorp New	KEY	($0.02)	$0.06	(162.5%)	1/22/2009	BTO	$6.22
Knight Cap Gp	NITE	$0.37	$0.50	66.7%	1/22/2009	BTO	$15.85
Lockheed Martin	LMT	$1.89	$1.89	1.0%	1/22/2009	BTO	$79.48
Lsi Industries	LYTS	$0.02	$0.22	200.0%	1/22/2009	BTO	$6.89
M&T Bank Corp	MTB	$1.14	$1.52	(4.7%)	1/22/2009	BTO	$42.59
Matthews Intl-A	MATW	$0.48	$0.50	1.5%	1/22/2009	AMC	$34.55
Memc Elec Matrl	WFR	$0.62	$1.05	(9.8%)	1/22/2009	AMC	$14.11
Meredith Corp	MDP	$0.43	$0.73	2.5%	1/22/2009	BTO	$17.76
Microsoft Corp	MSFT	$0.49	$0.50	2.1%	1/22/2009	AMC	$19.24
Monro Muffler	MNRO	$0.28	$0.27	5.6%	1/22/2009	BTO	$24.14
Netscout Systms	NTCT	$0.16	$0.04	23.5%	1/22/2009	AMC	$13.77
Nokia Cp-Adr A	NOK	$0.39	$0.69	(15.4%)	1/22/2009	BTO	$14.05
Oceanfirst Finl	OCFC	$0.32	$0.26	(11.1%)	1/22/2009	AMC	$14.97
Old Rep Intl	ORI	($0.25)	($0.05)	(25.0%)	1/22/2009	BTO	$11.55
Peoples Utd Fin	PBCT	$0.13	$0.16	0.0%	1/22/2009	AMC	$16.65
Potash Sask	POT	$2.37	$1.16	10.7%	1/22/2009	BTO	$69.86
Sherwin William	SHW	$0.53	$0.88	18.1%	1/22/2009	BTO	$56.34
Smith (Ao) Corp	AOS	$0.24	$0.81	25.0%	1/22/2009	BTO	$31.61
Southwest Air	LUV	$0.07	$0.12	50.0%	1/22/2009	BTO	$8.28
Suntrust Bks	STI	$0.18	$0.02	(22.2%)	1/22/2009	BTO	$20.89
Synaptics Inc	SYNA	$0.50	$0.33	34.5%	1/22/2009	AMC	$20.60
Synovus Finl Cp	SNV	($0.44)	$0.28	(162.5%)	1/22/2009	AMC	$5.66
Taiwan Semi-Adr	TSM	$0.09	$0.20	0.0%	1/22/2009	BTO	$7.37
Tcf Finl Corp	TCB	$0.24	$0.50	(20.0%)	1/22/2009	BTO	$10.61
Technitrol Inc	TNL	$0.09	$0.52	(14.3%)	1/22/2009	AMC	$3.21
Twin Disc	TWIN	$0.25	$0.37	(52.2%)	1/22/2009	N/A	$6.70
Ucbh Hldgs Inc	UCBH	($0.08)	$0.19	(200.0%)	1/22/2009	AMC	$3.83
Union Pac Corp	UNP	$1.28	$0.93	6.2%	1/22/2009	BTO	$41.23
Unitedhealth Gp	UNH	$0.78	$0.92	0.0%	1/22/2009	BTO	$24.89
Valley Natl Bcp	VLY	$0.28	$0.22	(25.0%)	1/22/2009	BTO	$15.87
China Bak Batry	CBAK	$0.01	($0.02)	42.9%	1/23/2009	N/A	$1.68
Dime Comm Bncsh	DCOM	$0.25	$0.17	0.0%	1/23/2009	BTO	$12.45
Gatx Corp	GMT	$0.59	$0.62	35.7%	1/23/2009	BTO	$28.59
Genl Electric	GE	$0.44	$0.68	0.0%	1/23/2009	BTO	$13.77
Harley-Davidson	HOG	$0.58	$0.78	(10.1%)	1/23/2009	BTO	$13.95
Mb Financl Inc	MBFI	$0.27	$0.44	(11.6%)	1/23/2009	BTO	$21.34
Schlumberger Lt	SLB	$1.10	$1.11	2.4%	1/23/2009	BTO	$40.18
Webster Finl Cp	WBS	$0.18	$0.10	(37.0%)	1/23/2009	BTO	$9.80
Xerox Corp	XRX	$0.34	$0.41	0.00%	1/23/2009	BTO	$7.82

BMO = Before The Market Open, AMC = After Market Close

¹Some of the companies listed in the earnings calendar may not be in the Zacks Rank universe.

"NTCT" Free Stock Analysis: Buy? Sell? Hold?
"BNI" Free Stock Analysis: Buy? Sell? Hold?
"UTX" Free Stock Analysis: Buy? Sell? Hold?
"JNJ" Free Stock Analysis: Buy? Sell? Hold?
"IBM" Free Stock Analysis: Buy? Sell? Hold?
"GE" Free Stock Analysis: Buy? Sell? Hold?
"MSFT" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

Japanese Stock Indexes See Large Turnover

IndexUniverse Staff — Tue, 02 Dec 2008 02:13:33 +0000

State Street Global Advisors' SDPRs offer the only two Japanese equity ETFs based on this index series.

The annual rebalancing of the Russell/Nomura Japanese stock indexes just concluded, resulting in more than 30% turnover rates for each series in the benchmarking family.

The Russell/Nomura Total Value Index had 212 deletions and 176 additions, while the Russell/Nomura Total Growth Index had 270 deletions and 136 additions.

Those changes represented capitalization turnover ratios of 30.9% for value, and 33.3% for growth, among the highest-ever index rebalancing for the Russell Investments and Nomura Securities' Japanese equity benchmarks since their launch in 1981.

There are Japanese stock exchange-traded funds from Barclays Global Investors' iShares family, Northern Trust's NETS and from WisdomTree Investments.

However, State Street Global Advisors' SDPRs offers the only two Japanese equity ETFs based on this index series: the SPDR Russell/Nomura PRIME Japan ETF (NYSE Arca: JPP) and the Russell/Nomura Small Cap Japan ETF (NYSE Arca: JSC).

JPP and JSC are relatively small ETFs in terms of assets. JSC had close to $73 million in assets through last month while JPP had only $13.5 million.

Among all single-country international ETFs this year, those focused on Japan have held up relatively well in terms of performance. JPP was down 32.15% heading into Monday, while JSC had dropped 23.99% so far in 2008, according to Morningstar data.

That may not seem like impressive performance on the surface, but consider that the broad-based iShares MSCI EAFE Index (NYSE: EFA) for developed international markets has slid more than 45% this year.

The Russell/Nomura Prime Index, which is JPP's index, measures the performance of Japan's top 1,000 float-adjusted stocks. This year, 26 companies came into the Prime Index for the first time and its total market capitalization decreased from 201 trillion yen to 200 trillion yen (as of Oct. 15).

The turnover ratio of the index was 1.6%, which is relatively low compared to previous years, the companies said in a statement.

The number of stocks in the Russell/Nomura Small Cap Index, JSC's underlying index, dropped by 76 companies to 1,100. The small-cap index represents the top 85% and bottom 15% of the Russell/Nomura Japan Equity Index, on a market capitalization basis.

The decrease in JSC's index reflected the larger decline in the capitalization of small-cap companies relative to the overall market decrease.

Ten ETFs I’m Thankful For

Matt Hougan — Thu, 27 Nov 2008 02:15:32 +0000

The ETF industry has given us a lot to be thankful for: lower costs, better diversification, lower taxes.

In the spirit of Thanksgiving, I thought I would pull together a list of 10 ETFs I'm have earned my thanks. The list could be much longer: 20, 30 or even 50 ETFs might qualify. But these ETFs have helped shape the ETF industry of today, allowing millions of investors to build better portfolios. As a journalist, they've been fun to write about, too.

1) S&P 500 SPDR (NYSEArca: SPY): SPY was the first ETF in the United States and set the stage for everything that followed. It remains the largest and most-traded ETF in the world, delivering complete exposure to the S&P 500 for an expense ratio of just 0.0945%. What's more, it trades at super-tight spreads and hasn't paid a capital gains distribution since 1996. What more do you want?

2) PowerShares NASDAQ-100 QQQQ (NasdaqGM: QQQQ): This ETF has slipped recently from being the #2 or #3 largest ETF in the world down to the #6 slot. But QQQQ is still hugely important ETF, and played a tremendous role in the history of ETFs. Back in the 1990s, when SPY was still primarily an institutional tool, QQQQ started seeping into the broader consciousness, catching fire with the retail and trader communities. Without QQQQ, the modern ETF industry wouldn't exist.

3) Vanguard Total Market Index Fund (NYSEArca: VTI): This one is all about costs. VTI is the cheapest retail share mutual fund in the world. For 0.07% per year, you can buy exposure to all the stocks in the U.S. That's beautiful. For the record, that is 1/15^th the cost of the average mutual fund in the U.S.

4) Vanguard Emerging Markets ETF (NYSEArca: VWO): Again, this one is all about costs. VWO proves that emerging markets exposure needn't be costly. The fund charges just 0.25% in annual expenses, compared to 0.75% for the dominant iShares Emerging Market ETF (NYSEArca: EEM) and 1.62% for the average international equity mutual fund (per ICI). Saving 1.37% per year adds up quickly.

5) SPDR Gold Shares (NYSEArca: GLD): GLD marked a turning point in the ETF industry. It was the first commodity ETF listed in the U.S., and the first product ever that allowed investors to buy gold directly in a brokerage account. This lowered the cost and hassle of buying gold significantly, and brought a huge new group of investors into the ETF market; after all, you couldn't and still can't get this exposure in a mutual fund. Today, it has more gold than the People's Republic of China. Remarkable.

6) PowerShares DB Commodity Index Fund (NYSEArca: DBC): Like GLD, DBC was a ground-breaking ETF in the commodity space. As the first broad-based commodity futures ETF, DBC significantly lowered the costs of accessing commodities and helped move commodities from the fringes into mainstream asset allocations. While a lot of people have been burned by the commodities bubble, long term, I believe people will benefit from the diversification commodities offer.

7) WisdomTree Small Cap Emerging Markets ETF (NYSEArca: DGS): DGS was the first small-cap emerging markets ETF; since, at least three other funds have launched. DGS was important because it broke the mold of where index funds and ETFs could operate and where they could not. The old thinking said that index-based strategies couldn't work in illiquid corners of the market, and that active managers could outperform in these areas as well. DGS changed all that, showing that a thoughtfully structured ETF could provide low-cost access to those markets and help investor add a noncorrelated source of returns to their portfolios.

8) NETS Dow Jones Wilshire Global Total Market Index Fund (Ticker TBD): I'm including this ETF even though it has yet to launch. Why? When Northern Trust filed for this fund in 2007, it was the first public filing for a truly global equity ETF—one that held both U.S. and international stocks in a single portfolio. Since then, a number of issuers have launched funds, including the Vanguard Total World Stock ETF (NYSEArca: VT). But Northern Trust deserves the credit for breaking the mold, and helping to break down the problem of "home bias" in the investing community.

9) ProShares UltraShort S&P 500 (NYSEArca: SDS): Love them or hate them, the ProShares ETFs have reshaped the investment landscape. ProShares family of leveraged and inverse-leveraged ETFs has attracted nearly $20 billion in assets and huge amounts of trading volume over the past two years. SDS was one of the original ProShares, providing -200% exposure to the S&P 500. I fear a lot of investors misuse these funds, but at the same time, they are very well-designed and very empowering if used correctly.

10) iShares Lehman Aggregate Bond Index Fund (NYSEArca: AGG): Bonds are one of the fastest growing segments of the ETF industry, and AGG was one of the first bond ETFs to list. The fund provides broad-based exposure to the fixed-income market for just 0.24% in expenses. Its existence (and the existence of other broad-based equity ETFs) means you can create a full asset allocation portfolio using ETFs and ETFs alone.

That's 10. I could go one all day. How about the CurrencyShares Euro Trust (NYSEArca: FXE), for opening up the currency market? How about one of the alternative energy funds for completely opening up the alternative energy market, be it the PowerShares WilderHill Alternative Energy ETF (NYSEArca: PBW) or the globally oriented Market Vectors Global Alternative Energy ETF (NYSEArca: GEX). Or the Select Sector SPDR ETFs. Or the iShares MSCI EAFE ETF (NYSEArca: EFA). Or...

As an investor, ETFs allow me to create a significantly better portfolio at significantly lower costs with significantly less tax exposure than was possible five or 10 years ago.

I'll give thanks for that.

We know it’s never easy and there is no Holy Grail. But…

Jack Crooks — Wed, 05 Nov 2008 12:39:06 +0000

Key News
• Credit-default swap traders wagered the most on debt of Italy, Spain and Deutsche Bank AG, according to a Depository Trust&Clearing Corp. report that gives the broadest data yet on the unregulated market. (Bloomberg)
• Key Reports Due (WSJ):
8:15a.m. Oct ADP Employment Report: Expected: -100K. Previous: -33K.
10:00a.m. Oct ISM Non-Manufacturing Composite Index: Previous: 50.2.

Quotable
"An essential point in the social philosophy of intervention is the existence of an inexhaustible fund which can be squeezed forever. The whole system of intervention collapses when this foundation is drained off: The Santa Claus principle liquidates itself.”

Ludwig von Mises

FX Trading – We know it’s never easy and there is no Holy Grail. But…
…we are big believers that after following the chain of price action, sooner or later, it all comes back in some way to the rate of interest. Interest rates are the core of all things financial, though the link may be seemingly distorted at times.

From Bloomberg this morning:

“Credit markets are still creaking even after the biggest decline on record in the rate banks say they charge each other to borrow dollars.

“The London interbank offered rate, or Libor, for three- month loans fell to 2.51 percent today, from 4.82 percent on Oct. 10.”

Now take a look at a very interesting chart next page from the excellent economic research team at Northern Trust which shows the 3-month Libor minus the 3-month US Treasury bill as another way of viewing credit market tightness:

Now take a look at the chart above compared to the Dow Jones Industrials Average Inverted chart below. We have inverted the chart so you can see the visual correlation with the chart above [by inverting it means the line going down represents the DJIA going higher]:

…and of course, because our morning missive is supposed to have something to do with currencies, we look at the US dollar compared to the stock market in the next chart; the correlation has been quite tight lately….

So, is there a point? Well, we think the point is this:
• As credit markets normalize, it allows stocks the opportunity to make that much needed bounce, or correction, as they are extremely oversold on most measures.
• And as stocks correct, it by definition represents an abatement of fear, or at least ebb in said fear.
• Then, the risk aversion trade i.e. pouring into the dollar and Japanese yen to hide from fear, may go on holiday.
• Thus, we have the interest rate link back to the good old US dollar and why we still guess a playable correction is in order.

But, of course it is a story. Mr. Market isn’t cooperating so far this morning as both the yen and buck are the strongest in the pack. But stay tuned. The next ten minutes in this market can change the picture completely. That’s what we call volatility.

Jack & JR

Inflationary Record Book

Contrarian Profits — Wed, 05 Nov 2008 11:58:04 +0000

With inflation in prices running at more than 10%, and inflation in credit running at up to 100% and more, bond investors are getting the lowest yield in half a freaking century? Hahahaha! Morons!

From Bloomberg.com we get the headline “Treasuries’ Scarcity Triggers Repo Market Failures”, by Liz Capo McCormick, which is probably very scary, but I have no idea what the hell she is even talking about or why it is important, neither of which is made any clearer when the article explains, “In a repurchase agreement, or repo, a customer provides cash to a dealer in exchange for a bill, note or bond. The exchange is reversed the next day, with the customer receiving interest on the overnight loan.…

Hang Seng Indexes Construct REIT Benchmark

IndexUniverse Staff — Wed, 29 Oct 2008 08:01:25 +0000

Hong Kong is considered one of the most mature, if also volatile, real estate markets in the world.

Making bets on the performance of the real estate investment trust market in Hong Kong may soon become easier.

The Hang Seng Indexes Company has launched a REIT index covering real estate investment trusts listed in Hong Kong. The Hang Seng REIT Index will serve as the basis for index products, including funds and derivatives, says the index provider, as well as a benchmark for investors in the REIT asset class.

Hang Seng Indexes continues to move into more investment niches popular with ETF investors.

Earlier this year, it launched leveraged and short indexes on the Hang Seng Index and Hang Seng China Enterprises Index (see story here.)

While international real estate ETFs have become more prevalent, the focus has been on European real estate to a large extent. Ten of the 12 real estate ETFs are broad international or global funds. There is no ETF offered in the U.S. tracking the Hong Kong REIT niche, and the local brand name of the index provider could make it an interesting product.

Claymore Securities offers the Claymore/AlphaShares China Real Estate ETF (NYSEArca: TAO), based on AlphaShares own China Real Estate Index. TAO is 93% weighted to Hong Kong issues, but almost all of its holdings are non-REIT.

The only other Asia-themed REIT ETF is the Tokyo Stock Exchange REIT Index Fund (NYSEArca: JRE) from Northern Trust's NETS family of ETFs. There are two Japanese REIT ETFs also available locally in Japan and launched by rival asset managers, Nomura Asset Management and Nikko Asset Management (see story here.)

Japan is a much larger REIT market than Hong Kong, representing 10% of the global REIT marketplace. Hong Kong was the 14-largest real estate market in the world (1.2%), according to a comprehensive study completed for the Journal of Real Estate Portfolio Management in 2007.

However, Hong Kong only began listing REITs in 2005. This shows in a comparison of the total number of holdings in TAO and the Japanese REIT ETFs, versus the Hang Seng REIT index. While the TAO, JRE and the local Japanese REIT funds might seem concentrated at approximately 40-50 holdings, the Hang Seng REIT Index is more like a poker hand than investment sector, with seven total holdings.

The holdings are:

GZI REIT: 14.78%
Sunlight REIT: 15.42%
RREEF CCT REIT: 12.54%
Prosperity REIT: 11.42%
Link REIT: 20.25%
Regal REIT: 11.55%
Champion REIT: 14.05%

TAO has 50 holdings, but only two of the REITs in the new Hang Seng index, Link REIT and Champion REIT. Notably, though, LINK REIT is TAO's largest holding, at 8.06%, while Champion REIT only represents 1.08% of TAO, according to company data as of yesterday. TAO is down 53% year-to-date, through Sept. 30, according to the Claymore web site. TAO is down 31% in the past three months, and a shade under 40% in the past six months.

Kevin Carter, CEO of AlphaShares, said while seven companies can be pretty thin as far as index construction, it does represent the existing Hong Kong REIT market, and that market will continue to grow.

"Having any index for benchmarking purposes is a good thing and you have to start somewhere, and the market will have more and more REITs," Carter said, adding even the mainland is talking now about adding a REIT structure.

TAO is much broader in focus because it includes real estate management and development companies in Mainland China that have long-term leases to develop land and sell it for the government. However, these firms do not enjoy the tax advantages of REITs.

Overall, Hong Kong is considered one of the most mature, if also volatile, real estate markets in the world, and also one of the globe's most transparent markets.

ETFs Grab More Market Share, Reach 35%

IndexUniverse Staff — Tue, 07 Oct 2008 01:49:43 +0000

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September was a disaster for the stock market in general, but not necessarily ETFs.

Exchange-traded funds continued to grow in prominence as part of the overall U.S. equities market in September, reaching 35% of all trading, up from the previous record-level of 31%, just reached in August, according to National Stock Exchange data. The biggest part of that trading story has been State Street Global Advisors' SPDRs family of ETFs, which for the month of September represented approximately 50% of all ETF trading volume, with close to $1.4 trillion of the nearly $2.8 trillion in ETF trading volume. Year-to-date, the SPDRs also represent approximately 50% of ETF trading volume ($8.8 trillion), with Barclays Global Investors' iShares family a distant-second at $3.75 trillion.

But in a month of massive market turmoil, the news was not all good for ETFs. The iShares lost ground versus the SPDRs in terms of overall industry market share, and recent industry darling ProShares, which has received mounds of press for its rapid rise to above $20 billion in assets, saw major outflows in September, outflows at a level far surpassing any other ETF provider.

SPDR portfolios, such as its S&P 500 ETF (AMEX: SPY), saw much of the short-term market trading action, and its gold portfolio (NYSE: GLD), has been amassing considerable assets as the equities markets freefall. However, SSgA has not only led the race in terms of trading volumes, but has also gained considerable ground on Barclays Global Investors in terms of overall assets year-to-date. The SSgA ETF family had close to $169.6 billion in assets at the end of September, up from $144 billion in August, whereas BGI fell from $295 billion in August to $280 billion.

On a year-over-year basis, there has been an approximate $30 billion asset flip-flop between the two top ETF providers. In September 2007, BGI had $312 billion and SSGA $133 billion. And in terms of year-to-date cash flow, SSGA has net cash flow of $38.5 billion, while BGI stands at $22.7 billion. In terms of the worst asset story in September, ProShares was far and away the ETF industry loser in this respect, down $2.4 billion in cash flow. No ETF provider even came close to that level of net outflows for the month. The second-largest outflows were experienced by WisdomTree, which had net outflows of $119 million.

SPDRs has been buoyed by trading on the SPY, which in September had close to $20 billion in net cash flow. That is twice its year-to-date net cash flows of near $10 billion. Investors piling into gold also helped the SPDRs: GLD had net inflows of close to $3 billion in September.

Barclays suffered mostly in its broad international ETF portfolio. In fact, among the top ten largest ETF portfolios, only the iShares MSCI EAFE (NYSE: EFA) had net outflows in September, dropping $285 million. For the year-to-date period, the EFA has hemorrhaged more than $4 billion in assets. What's more, year-to-date among the top-ten largest ETFs, EFA is the only fund with net outflows of more than $1 billion, and the second-worst asset story is a distant-second. Unfortunately for iShares, it's also one of its own: the iShares Russell 1000 Growth Index Fund (NYSEArca: IWF) has had year-to-date outflows of $773 million.

Overall, only three of the top-ten ETFs have had net outflows year-to-date, and all three are iShares, the third being the iShares MSCI Emerging Markets (NYSEArca: EEM), which lost $129 million for the year. While BGI still has six of the top 10 industry ETFs in terms of assets, only two of those ETFs have larger asset bases than they did one year ago-the iShares Lehman Aggregate Bond Fund (NYSEArca: AGG) and the iShares Russell 2000 Index Fund (NYSEArca: IWM). And its largest ETFs are off considerably from a year ago: EFA is down from $48 billion in September 2007 to $32 billion as of the end of September. A silver lining for EEM is that, while it is still down year-to-date, it was actually fourth in net inflows in September among the largest ETFs, with a little more than $3 billion gained.

Notable, but not surprising among the September data is the poor performance of exchange-traded notes, the sister-product to ETFs, which have been hard hit by their unsecured debt structure amidst the worsening credit crisis. While there has been debate as to whether the unsecured-debt nature of these investments would cause a direct hit on their marketing, the answer from the September data seems to be a ‘yes.' The ETN industry had net outflows of $443 million in September, with Barclays' iPath family, in particular, accounting for almost all of that unwanted movement, down $474 million in net inflows for the month. Only three among the 12 ETN providers had net inflows in September, and at levels that would were nothing to get overly excited about: PowerShares' ETNs (co-branded with Deutsche Bank) had $68 million in ETN inflows; UBS' family has $1 million; and HSBC's ETNs saw $6 million in inflows. All of the other providers were either flat or negative, and with nine of the 12 ETN providers having $100 million or less in total assets, and marketing efforts hamstrung during the credit crisis, the situation does not look promising in the short-term for these investments.

Among the major exchange-traded product categories, the only dollar loser in September was currency, which had net outflows of $239 million. It was a minor recovery for currency ETFs and ETNs, which in August, had larger outflows of $513 million. The two worst category performers from August found better fortunes in September. Commodity portfolios, which had outflows of $542 million in August, had net cash flow of $3.6 billion in September, but that was primarily buoyed by investors migrating to GLD. The global/international category, which had close to $2 billion in negative net cash flow in August, had positive cash flow of $3.88 billion in September, the second-most among categories, but still far behind domestic equity net cash flow of $47 billion for the month.

Month End September 2008
Data Compiled by National Stock Exchange. Click here to view product list of ETFs/ETNs.

	Assets ($Mil)		Net Cash Flow ($Mil)		Notional Trading Vol ($Mil)
By Issuer	Sep-07	Sep-08	YTD '08	Sep-08	YTD '08	Sep-08

BGI/iShares	$312,353	$280,275	$22,739	$16,314	$3,751,620	$558,116
SSgA	$133,376	$169,601	$38,454	$37,066	$8,805,931	$1,397,788
Bank of NY	$10,432	$8,240	($447)	$158	$179,900	$30,626
Vanguard	$37,298	$46,757	$15,901	$1,149	$135,661	$21,769
Invesco/PowerShares	$36,967	$35,447	$4,631	$2,111	$1,529,059	$228,741
Rydex	$5,737	$5,211	$315	$10	$49,803	$8,807
Fidelity	$127	$58	($37)	($26)	$6,918	$702
Northern Trust	$0	$41	$56	$2	$54	$7
First Trust	$949	$1,025	$320	$15	$2,403	$291
Ameristock/Victoria Bay	$925	$2,903	$2,196	$1,015	$214,328	$34,027
Van Eck	$1,520	$4,753	$3,505	$485	$61,662	$9,197
Wisdom Tree	$4,446	$4,075	$878	($119)	$11,987	$1,216
ProFunds	$8,028	$20,175	$11,016	($2,415)	$2,119,221	$420,931
Claymore	$1,376	$1,470	$269	($89)	$7,249	$871
X-Shares	$149	$187	($10)	($33)	$518	$56
FocusShares	$0	$17	($5)	$0	$98	$13
Merrill (HOLDRs)	$8,859	$7,466	$1,577	$2,032	$587,620	$81,589
Bear Stearns	$0	$49	$0	$0	$4	$1
Ziegler	$4	$7	$0	$0	$18	$2
MacroShares	$42	$22	$430	($22)	$1,217	$25
SPA	$0	$23	$15	$2	$67	$11
Greenhaven	$0	$21	$24	($1)	$141	$11
RevenueShares	$0	$37	$42	$9	$126	$16
ALPS	$0	$4	$5	$0	$10	$2
ETF Total	$562,590	$587,864	$101,873	$57,662	$17,465,614	$2,794,815

Barclays/iPath ETNs	$3,197	$4,150	$656	($474)	$24,602	$3,225
Swedish Export Credit ETNs	$262	$356	$315	($17)	$1,654	$123
Deutsche Bank/PowerShares ETNs	$0	$659	$614	$68	$7,880	$2,779
Lehman ETNs	$0	$13	$16	$0	$30	$1
Bear Stearns ETNs	$65	$65	$20	$0	$255	$9
Morgan Stanley/Van Eck ETNs	$0	$108	$101	($26)	$462	$188
Credit Suisse ETNs	$0	$12	$15	$0	$11	$2
UBS ETNs	$0	$51	$60	$1	$103	$14
Goldman Sachs ETNs	$73	$13	($204)	$0	$245	$21
JP Morgan ETNs	$0	$3	$6	$0	$6	$1
HSBC ETNs	$0	$12	$12	$6	$15	$8
Claymore ETNs	$0	$3	$0	$0	$4	$0
ETN Total	$3,596	$5,446	$1,611	($443)	$35,267	$6,371

Total ETF/ETN	$566,187	$593,309	$103,484	$57,219	$17,500,881	$2,801,187

	Assets ($Mil)		Net Cash Flow ($Mil)		Notional Trading Vol ($Mil)
By Category	Sep-07	Sep-08	YTD '08	Sep-08	YTD '08	Sep-08

Domestic Equity	$344,801	$370,561	$71,575	$47,269	$15,180,448	$2,462,384
Global/International Equity	$166,136	$129,538	$3,108	$3,881	$1,606,625	$218,869
Fixed Income	$29,145	$50,368	$17,104	$2,691	$130,803	$21,981
Commodity	$22,862	$37,854	$10,259	$3,617	$536,600	$88,920
Currency	$3,242	$4,988	$1,438	($239)	$46,405	$9,032
Total	$566,187	$593,309	$103,484	$57,219	$17,500,881	$2,801,187

	Assets ($Mil)		Net Cash Flow ($Mil)		Notional Trading Vol ($Mil)
Top 10 ETFs/ETNs by Size	Sep-07	Sep-08	YTD '08	Sep-08	YTD '08	Sep-08

SPDR Index 500	$81,109	$90,131	$9,662	$19,427	$6,427,849	$993,664
iShares MSCI-EAFE	$48,874	$32,817	($4,108)	($285)	$180,216	$27,193
SPDR Equity Gold	$13,803	$21,362	$3,646	$2,868	$231,217	$43,083
iShares MSCI-Emerging Mkts	$22,497	$19,962	($129)	$3,077	$489,495	$71,445
PowerShares QQQ	$19,959	$18,089	$1,886	$2,360	$1,464,489	$221,332
iShares S&P 500	$17,901	$16,761	$2,485	$767	$94,648	$15,109
iShares Russell 2000	$12,719	$16,672	$7,536	$6,375	$1,331,429	$216,669
SPDR Financial	$3,532	$12,656	$9,959	$6,092	$734,594	$133,019
iShares Russell 1000 Gr	$13,131	$11,703	($773)	$146	$37,464	$3,975
iShares Lehman Agg	$7,069	$9,509	$1,975	$79	$10,763	$1,723

	Sep-07	Sep-08

Number of Listed ETFs	582	720
Number of Listed ETNs	11	93
Total Listed ETFs/ETNs	593	813

Source: Data provided by the National Stock Exchange

Words from the (investment) wise for the week that was (September 22 – 28, 2008)

Prieur du Plessis — Sat, 27 Sep 2008 20:20:30 +0000

As I am travelling at the moment, this week’s edition of "Words from the Wise" does not provide the customary review of the financial markets' movements and economic statistics. Given time constraints, today I will only share with you a number of vid...

Allied Motion Technologies Inc. (AMOT): An Old Company with New Technologies

QualityStocks — Thu, 11 Sep 2008 12:24:07 +0000

Allied Motion Technologies (AMOT) is a maker of motion control products such as brushless and brush direct-current (DC) motors, drives, and control electronics. Customers of Allied Motion Technologies include companies from the semiconductor manufacturing, industrial automation, medical equipment, and military and aerospace markets. The company also manufactures optical encoders used to measure rotational and linear [...]

Russian system is on borrowed time

Jason Corcoran — Wed, 18 Jun 2008 12:19:00 +0000

Financial News

Jason Corcoran in Moscow

16 June 2008

The Russian securities market has attracted substantial inflows from western investors in the past few years but the infrastructure to support the growth is only slowly catching up.

The average daily volume of transactions of Russian stocks stands at $6.1bn (€3.9bn), which includes $5bn traded on domestic stock exchanges with the remainder traded on foreign exchanges, according to investment bank Troika Dialog.

Investors have recognised some improvements over the past few years, but still regard dealing in Russian securities as a transaction, settlement and custody risk.

Most Russian investment offerings to non-Russian investors are domiciled in the Cayman Islands or in Guernsey, and often administered in Ireland. Global custodian State Street administers Prosperity Capital and Hermitage Capital, the two largest equity funds investing into Russia, from Dublin.

Damian McEvoy, associate vice-president at State Street’s subsidiary Investors Trust Europe, said: “Any initial scepticism about investing in such funds is unfounded, as all investors must go through rigorous anti-money laundering checks before being allowed to subscribe to these funds.

“But clearing and settlement standards have some way to go before reaching international benchmarks. Investors in Russian securities are typically only permitted to redeem on a monthly basis, and can sometimes have their redemption payments delayed due to the corresponding delay in the settlement of the underlying security sales.”

Hedge fund Hermitage, which has scaled down its activities in Moscow, has experienced considerable delays in the transfer of funds within Russia, the conversion of roubles into other currencies and the remittance of monies outside of Russia.

It said: “Delays may occur in the collection of dividends, proceeds of sales, redemption monies and other cash sums, possibly causing currency exchange loss, and some monies may not be received. In addition, due to the local postal and banking systems, it cannot be guaranteed that all entitlements attached to securities acquired by the fund, including in relation to dividends, can be realised.”

Most custodians point to the lack of a central depository, the numerous registrars and the need to register securities physically as the market’s most glaring inefficiencies.

Ramy Bourgi, head of emerging markets development at Société Générale Securities Services, said: “There is a record of the system working since the 1998 crash but it is not the most efficient from an operational point of view. It would benefit from a central depository and if there were not as many as 76 registrars.”

Legislation proposed by the Russian regulator two years ago to create a central depository was never passed in Russia’s parliament. Industry sources said settlement services provider Euroclear was approached by the regulator to be an adviser and create such a depository but that a final contract was never signed.

Stephen Cohen, chief executive of Troika Dialog’s hedge fund business, said: “It is a creaking system. Settlement can suffer from long delays when you use local registrars and their custody costs can be higher than in other markets.”

Troika’s $150m Cayman-registered Russian hedge fund uses Deutsche Bank as a prime broker and Deutsche Bank uses a network of sub-custodians in Russia.

A large amount of trading in Russian shares still occurs outside the country – in US or global depositary receipts with settlement in US dollars – but Russia is moving to repatriate this activity. That would require greater direct foreign investment in Russian equities, which has been erratic due to poor infrastructure and investor sentiment.

Some custodians, such as Northern Trust, have so far opted to steer clear of Russia because of the high proportion of captive non-state pension funds.

A Northern Trust spokeswoman said: “Russia is not a country in which we are really involved, and neither are we looking at it at the moment. There are apparently few pension fund assets in Russia. As serving pension funds – asset management and asset servicing – is one of the main parts of our business, there are fewer opportunities for Northern Trust. The main asset owners in Russia are the banks, and it is not a sector we are chasing at the moment.”

Acquisition of Russian banks by foreign organisations is seen increasingly as important for entering the competitive domestic custody market.

UniCredit is a leading sub-custodian in the Russian market through its ownership of International Moscow Bank, which was acquired by the Italian group’s Bank Austria Creditanstalt subsidiary in January 2007.

UniCredit, which also acquired Russian brokerage Aton Capital last year, sees Citigroup and ING as its main rivals.

Meanwhile Société Générale is hoping that increasing its stake in local bank Rosbank to 50% this year will allow it to become one of the dominant participants in domestic investor services and business coming in and out of Russia. The French bank paid $1.7bn for a 30% share of Rosbank, in addition to the 20% it already owns.

Bourgi said: “Russia is our top priority for Eastern Europe and Rosbank has a good domestic client base with $25bn in assets. Our job is to work with Rosbank to raise services to international standards and to serve existing clients.”

Bourgi, who joined SG in September last year with a mandate to develop the bank’s capability in emerging markets, said global custodians need a presence on the ground with local expertise.

“You cannot offer direct custody without being in the market. We go where clients want to go and Russia is an up-and-coming market,” he said.

Rosbank’s clients include many high-profile corporates that are beginning to branch out in international markets.

Consequently, Bourgi believes the domestic market is as attractive as the in-bound investor segment, if not more. He said: “When our Russian clients go international we will be able to capture their out-bound fund administration and custody needs.”

Information service Lipper Feri’s figures show that investments by European equity funds investing in the CEE – defined as Russia, Eastern Europe, the Baltic states and Turkey – rose from €5.3bn ($8.4bn) in 2002 to €38.6bn in July 2007. Much of that spurt is attributed to the growing interest in Russia.

While aspects of Russia’s capital markets have developed apace, its infrastructure is clearly lagging.

Russian system is on borrowed time

Jason Corcoran — Wed, 18 Jun 2008 12:19:00 +0000

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