Today - Monday, April 27, 2015
- TrueCar estimates U.S. car sales will rise 6.1% Y/Y in April to 1.475M units.
- Strong demand is expected to be reported in the crossover, SUV, and pickup truck segments. Incentive spending is seen increasing 0.6% Y/Y to $2,601 per unit. April U.S. forecasts from TrueCar by automaker are listed below.
- Fiat Chrysler Automobiles (NYSE:FCAU): +10.6% to 198.6K units, market share +60 bps Y/Y to 13.5%.
- Ford (NYSE:F): +6.2% to 223.3K units, market share flat at 15.1%.
- General Motors (NYSE:GM): +5.9% to 269.1K units, market share -10 bps Y/Y to 18.3%.
- Honda (NYSE:HMC): +1.9% to 135K units, market share -30 bps Y/Y to 9.2%.
- Hyundai (OTC:HYMLF): -5.8% to 62.3K units, market share -60 bps to 4.2%.
- Kia (OTC:HYMLF): +7.9% to 57.9K units, market share flat at 3.9%.
- Nissan (OTCPK:NSANY): +8.7% to 113K units, market share +20 bps Y/Y to 7.7%.
- Subaru (OTCPK:FUJHY): +23.5% to 49.5K units, market share +50 bps Y/Y to 3.4%.
- Toyota (NYSE:TM): +3.4% to 206.4K units, market share -40 bps Y/Y to 14.0%.
- Volkswagen (OTCQX:VLKAY): -4.7% to 48.4K units, market share -40 bps Y/Y to 3.3%.
- The yen weakened for a few minutes following the news, but has since retaken that ground, with dollar/yen stronger by 0.15% on the session to ¥119.09. JGBs are snoring through the news as well, with the 10-years up one basis point at 0.30%.
- Fitch keeps the outlook stable, but warns of another rating cut if: 1) Evidence that the authorities’ commitment to fiscal consolidation was weakening, such as failure to articulate a clear and credible strategy for stabilizing public debt ratios, or slippage relative to targets; 2) Weaker macroeconomic performance than Fitch expects for a sustained period, intensifying the challenge in stabilizing the public finances; 3) A sharp and sustained rise in real interest rates demanded by investors to hold government debt.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DBJP, NKY, JYN, EZJ, JPNL, EWV, YCL, HEWJ, ITF, JGBL, JPP, JGBT, JGBB, FJP
- Etihad, Emirates, and Qatar Airways are seen as bigger threats to U.S. carriers with international routes after increasing capacity rapidly over the last few years.
- The aggressive growth of the Middle East airlines has prompted American Air Lines Group (AAL -0.8%), Delta Air Lines (DAL), and United Continental (UAL -1%) to make allegations of unfair competition due to the large subsidies the group takes in.
- Middle East carriers have increased their presence with some of the highest-profit routes in the world.
- Chinese airlines (ZNH, CEA, OTCPK:AIRYY) are also catching up to U.S. airlines, due largely to growth in the domestic market. OAG estimates China will pass the U.S. in seat capacity by 2033.
- Jaguar Land Rover (NYSE:TTM) is the latest automaker to consider plant expansion in Mexico.
- Execs with the company say an investment of up to $500M is a possibility.
- A low wage structure in Mexico and its proximity to the U.S. have already lured in several major automakers with investments to boost capacity.
- Hyundai (OTC:HYMLF) plans to set up a shareholder-rights committee consisting in part of outside directors in response to criticism over a pricey land deal.
- The pace of audit reports will also be stepped up in an effort to increase transparency.
- Previously: Hyundai to use cash for controversial land deal (Oct. 16 2014)
- Shares of Volkswagen (OTCQX:VLKAY) rose more than 5% in Frankfurt trading after chairman Ferdinand Piech resigned after the weekend.
- The dramatic leadership crisis at the automaker created an overhang that has held back the stock over the last two weeks.
- Evercore ISI upgraded Volkswagen to a Buy rating due to the development.
- Previously: Volkswagen chairman steps down unexpectedly
- Interest rates won't be moving higher after the FOMC's meeting this week, but investors will still be watching the language of the statement for signs on when such a rate hike might be expected.
- Also on tap for Wednesday is the preliminary first-quarter readout on GDP, along with some early April economic reports.
- The spotlight in Asia this week falls on Japan, where a flurry of data releases and a central bank decision could provide clarity on the direction of the world's third largest economy.
- Central bank meetings in Taiwan and New Zealand are also on deck.
- Red-hot mainland Chinese shares soared again today, propelling the Shanghai Composite Index up 2.7% (+39% YTD) to its highest level since late 2007.
- "Funds of various mandates are underweight the market in a range of 140-600bp, and thus have marked benchmark stress and a need to raise exposure to China," Goldman Sachs said in a note, citing EPFR data. "With active fund managers still underexposed to the market, the rally isn't over."
- ETFs: FXI, ASHR, EWH, CAF, YINN, KWEB, PGJ, GXC, FXP, HAO, YANG, TAO, CHIX, PEK, CHIQ, CQQQ, MCHI, QQQC, XPP, YAO, ASHS, YXI, CN, CHXF, FCA, CHNA, CNXT, CHII, ECNS, CHIE, EWHS, CHIM, KBA, KFYP, FCHI, FHK, AFTY
Sunday, April 26, 2015
- The finance ministers of Slovenia and Germany on Saturday acknowledged for the first time that they are considering plans on what to do if a Greek deal is not reached by the end of June, breaking their long-held stance of insisting that the country must stay in the eurozone.
- The issue of a "Plan B" was raised during Friday's Eurogroup meeting in Riga, where Athens was strongly criticized for delaying the list of reforms needed to unlock its next round of funding.
- ETFs: GREK
- While the Bank of Japan is likely to cut growth and inflation forecasts this week, the question of additional stimulus still remains.
- Japan's central bank is expected to trim its inflation forecast for 2015 by several tenths of a percentage point from 1%, and shave its growth forecast from the current 2.1%.
- Despite inflation dropping back to zero, governor Haruhiko Kuroda has argued strongly that the BOJ's existing QE program is on track, leading many economists to think further easing is unlikely for now.
- ETFs: DXJ, EWJ, DFJ, DBJP, NKY, EZJ, JPNL, DXJS, EWV, SCJ, HEWJ, JSC, ITF, JPP, QJPN, FJP, JPMV, DXJT, DXJR, DXJC, DXJH, JHDG, DXJF
Saturday, April 25, 2015
- Airline stocks continue to outperform in 2015 as Q1 reports show strong efficiency gains and significant fuel expense savings.
- Investors get a crack at a sector ETF this week with the launch of the U.S Global Jets ETF (Pending:JETS) on April 30.
- A few tidbits from the fund company on the airline industry are listed below.
- Global ancillary revenue is a major source of growth in the the sector. The add-on sales (a la carte food/drink, advertising, frequent flyer programs, service commissions, baggage fees) are up to $31.5B after airlines only took in about $2.5B in 2007.
- Fleet upgrades and technology initiatives continue to boost efficiency.
- A shortage of pilots could reel in some of the concerns on capacity increases.
- Previously: Fuel savings and earnings give lift to airline stocks (April 24)
- Airline stocks: AAL, UAL, DAL, RYAAY, OTCPK:CPCAY, OTCPK:SINGY, CEA, ZNH, CPA, GOL, LFL, OTCPK:DLAKF, OTCPK:QUBSF, ALK, HA, OTCPK:AIRYY, OTCPK:MLYAF, OTCPK:AFLYY, VLRS, LUV, OTC:RYAOF, RJET, VA, LFL, SAVE, ALGT, CEA, OTC:EJTTF, OTCQX:ESYJY, AVH, OTC:AFRAF, OTCPK:ICAGY, AVH, OTCPK:JAPSY.
- Volkswagen (OTCQX:VLKAY) Chairman Ferdinand Piech resigned from the company today in an unexpected twist to the leadership crisis at the automaker.
- Deputy Chairman Berthold Huber will take on the chairman position until the board can elect a replacement.
- Previously: Volkswagen board backs CEO (April 17)
- Previously: VW looks to flatten leadership crisis (April 20)
Friday, April 24, 2015
- Investors have rushed $13B into WisdomTree's (NASDAQ:WETF) Europe Hedged Equity ETF (NYSEARCA:HEDJ) this year, bringing AUM to $20B, and making it 2015's most popular ETF, the largest Europe ETF out there, and the largest currency-hedged ETF, according to Ned Davis Research.
- The fund is also ahead 30% YTD - not too shabby. However, says NDR, all of the gains have come from the euro's depreciation. A strategy of buying the MSCI EMU Index (NYSEARCA:EZU) and shorting the euro would have returned 70% over the same period. In other words - amid a nice bull move in Europe - HEDJ's strategy of owning exporters, which should theoretically gain as the euro slides, hasn't worked (the fund must own mega-cap stocks deriving more than 50% of revenue from outside Europe).
- What gives? First, Europe's exporters have been hit by exposure to struggling LatAm countries. Second, the companies in the HEDJ already hedge currency exposure, booking it as an expense. Finally, the valuation of stocks in HEDJ trade at a 52% premium to a broad MSCI eurozone index.
- Source: Barron's
- Previously: WisdomTree stumbles as GMO questions value of currency-hedged ETFs (April 14)
- Previously: WisdomTree hedged small-cap Europe ETF opens for business (March 4)
- ETFs: VGK, FEZ, HEDJ, IEV, EPV, EZU, FEU, EURL, FEP, UPV, DBEU, ADRU, HEZU, FEEU, IEUR, FIEU, DBEZ, FEUZ, SBEU
12:00 PM| Comment!
- Continuing details on numerous corruption scandals, sluggish economic growth, and credit downgrades are garnering most of the headlines out of Brazil, but the Bovespa's 2.1% gain today has that index higher by 21% since a late-January bottom.
- A 70% gain in Petrobas over the last month and 25% for Vale lead the way. The banks are also on the move, though less subdued: Banco Santander Brasil (NYSE:BSBR) and Itau Unibanco (NYSE:ITUB) are up 13% and 16%, respectively. Banco Bradesco (NYSE:BBD) - recently the subject of a Goldman downgrade - is off 6% over the last month and 19% YTD.
- The iShares MSCI Brazil ETF (NYSEARCA:EWZ) has lagged - its top three holdings are Itau Unibanco, Ambev (NYSE:ABEV), and Banco Bradesco. The ETF is flat YTD, though higher by 15% over the last month.
- ETFs: EWZ, BRF, BRZU, EWZS, BRXX, BRAQ, BZQ, BRAZ, BRAF, UBR, DBBR, FBZ
- Mercedes-Benz (OTCPK:DDAIF) faces a fine of 350M renminbi ($57M) in China over allegations the automaker fixed prices on cars and parts.
- Anti-trust regulators in China first announced the infractions against Mercedes-Benz last August.
- Foreign automakers have heard from regulators in China with increasing regularity over the last year.
- Japan -0.83%
- Hong Kong +0.84%.
- China -0.47%.
- India -1.07%.
- London +0.31%.
- Paris +0.42%.
- Frankfurt +0.53%.
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