Nov. 11, 2013, 12:11 PM
- Valuations are high, says David Kostin and team - the Russell 2000's (IWM) P/E ratio is up 25% this year and stands above the 10-year average both in absolute terms and relative to the S&P 500. At the same time, EPS growth is set to slow from 11% this year to 8% in 2014.
- The Russell 2000 has outperformed the S&P 500 by nearly 1000 basis points over the last year.
- Has the catch-up already begun - small caps have lagged the broader market by 250 basis points over the past month.
- Small cap ETFs: IWM, TZA, TNA, UWM, VB, IJR, SLY, RWJ, TWM, URTY, SCHA, RWM, SRTY, SAA, DWAS, VTWO, SBB, RSCO, JKJ, SDD, XSLV, FYX, VIOO, EWRS, TWOK, SMLV, PXSC
Nov. 11, 2013, 8:51 AM
- "I don't want to miss out." a Los Angeles real estate appraiser said in a note to his financial adviser last week after seeing one pundit up his DJIA forecast to 20K.
- "Frankly, from 2009 until recently, I wanted to stay very conservative," says a technology sales manager. "I want to get more aggressive."
- A Houston attorney and stock market skeptic was turned by her Schwab statement showing YTD gains of nearly 20%. She's planning on set aside more of her paycheck for stocks. "Sometimes you feel like it's too late. But it's probably never too late."
- Inflows of $8.9B into long-only equity funds last week were the largest amount since March 2000. This follows October inflows into stock funds that were the 3rd largest on record.
- Index ETFs: SPY, QQQ, SH, DIA, IWM, TZA, TNA, SSO, SDS, PSQ, IVV, SPXU, UWM, SPLV, UPRO, VOO, QID, MDY, VB, SPXS, PRF, SPXL, DOG, TQQQ, IJR, RSP, SQQQ, DXD, SLY, QLD, MVV, RWJ, RWL, IJH, EPS, VO, TWM, URTY, SCHA, SDOW, UDOW, DDM, EZM, MIDU, VV, RWK, RWM, SRTY, SCHX, IWB, UMDD, IWR, SPHB, NY, SAA, BXUB, SCHM, DWAS, QQEW, VTWO, MIDZ, QQQE, MZZ, JKD, IVOO, DIM, VONE, SBB, RSCO, EQL, FNX, JKJ, CZA, SDD, ROLA, TRND, SFLA, XMLV, BXUC, XSLV, JKG, SMDD, MYY, FYX, QQXT, VIOO, EEH, ONEK, TRSK, TRNM, SPXH, EWRS, TWOK, FSE, BXDB, EWRI, FSU, PXLC, SMLV, FWDD, TNDQ, LGLV, EWRM, ALTL, PXMC, PXSC
Nov. 1, 2013, 12:03 PM
- Investors poured another $12.4B into global equity funds in the week ended Wednesday, with BAML's Michael Hartnett saying another $8B-$9B of inflows over the next two weeks would trigger a contrarian sell signal in his firm's flow-based model.
- This would coincide with BAML's Bull & Bear Index, which is getting a little to bullish for comfort. Fund manager cash levels were at 4.4% in October. A dip below 4% in November, says Hartnett, would trigger a bright red Sell alert.
- Stock index ETFs: SPY, QQQ, SH, DIA, IWM, VTI, TZA, TNA, SSO, SDS, PSQ, IWC, IVV, SPXU, UWM, SPLV, UPRO, VOO, QID, MDY, VB, SPXS, PRF, SPXL, DOG, TQQQ, IJR, RSP, DXD, SQQQ, SLY, QLD, PRFZ, MVV, RWJ, RWL, IJH, EPS, VO, SCHB, TWM, URTY, SCHA, SDOW, UDOW, VXF, USMV, DDM, EZM, MIDU, VV, RWM, RWK, IWV, SRTY, SCHX, IWB, ITOT, ONEQ, PDP, UMDD, IWR, OEF, SPHB, IYY, MGC, NY, SAA, SCHM, BXUB, DWAS, QQEW, VTWO, XLG, NYC, MIDZ, MZZ, QQQE, QUAL, DIM, IVOO, JKD, SBB, VONE, EXT, RSCO, CZA, FNX, EQL, JKJ, FVI, SDD, EUSA, ROLA, PZI, FDM, SFLA, TRND, RTLA, XMLV, THRK, XSLV, JKG, BXUC, SMDD, WMCR, MYY, FYX, QQXT, VIOO, TRNM, ONEK, EEH, SPXH, TRSK, IWL, VTHR, EWRS, TWOK, FSE, FSU, PXLC, EWRI, PWO, TOTS, SMLV, BXDB, EWRM, LGLV, UWC, TNDQ, FNDB, FWDD, ALTL, FMK, PXSC, SIZE, PXMC, PIQ, TWQ
Oct. 31, 2013, 7:08 AM
- Still coming to grips with the slightest hawkish twist to the FOMC statement yesterday afternoon, S&P 500 (SPY) futures are down 0.25% and the Nasdaq 100 (QQQ) is off 0.45%. Facebook soared after a big earnings beat last night, then actually turned red during the earnings call, but is now higher by 3% in the premarket.
- Europe opened to the downside, but is now mostly higher, and Asia was solidly lower overnight.
- Treasury yields have regained some of their composure, the 10-year yield falling 3 basis points to 2.51%, after shooting higher yesterday afternoon post-statement. Gold's off 1% to $1,.335 per ounce.
- ETFs: SPY, QQQ, SH, DIA, IWM, VTI, TZA, TNA, SSO, SDS, PSQ, IWC, IVV, SPXU, SPLV, UWM, UPRO, VOO, QID, MDY, VB, SPXS, PRF, SPXL, DOG, TQQQ, IJR, RSP, DXD, SQQQ, SLY, QLD, PRFZ, MVV, RWJ, RWL, IJH, EPS, VO, SCHB, TWM, URTY, SCHA, SDOW, UDOW, VXF, USMV, DDM, EZM, VV, MIDU, RWM, RWK, IWV, SRTY, SCHX, ITOT, IWB, ONEQ, PDP, IWR, UMDD, OEF, SPHB, IYY, MGC, NY, SAA, SCHM, BXUB, DWAS, QQEW, VTWO, XLG, NYC, MIDZ, MZZ, QUAL, QQQE, DIM, IVOO, JKD, VONE, SBB, EXT, RSCO, CZA, FVI, FNX, JKJ, EQL, EUSA, PZI, SDD, FDM, ROLA, SFLA, RTLA, TRND, XMLV, THRK, XSLV, JKG, BXUC, SMDD, WMCR, MYY, FYX, QQXT, VIOO, EEH, TRNM, ONEK, SPXH, TRSK, IWL, EWRS, VTHR, TWOK, FSE, PXLC, EWRI, FSU, SMLV, BXDB, PWO, TOTS, EWRM, LGLV, TNDQ, UWC, FWDD, ALTL, FMK, FNDB, PXSC, PXMC, SIZE, PIQ, TWQ.
Oct. 30, 2013, 2:31 PM
- Check that. Far from little-changed, traders use some real or imagined hint from the Fed statement to take a break from buying low and selling high, with the S&P 500 (SPY -0.7%) diving nearly 1% in a matter of minutes.
- Perhaps at work here - and we're grasping at straws - is the removal from the statement of a line expressing concern about tightening financial conditions.
- The Dow (DIA -0.6%), Nasdaq 100 (QQQ -0.4%), and Russell 2000 (IWM -1.5%).
- Index ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB, DIA, DDM, UDOW, DXD, SDOW, DOG, QQQ, QQEW, TQQQ, QID, SQQQ, PSQ, QLD, QQQE, IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
Oct. 30, 2013, 12:17 PM
- Leading indicator? Trailing? Coincident? The Russell 2000 (IWM -1%) has begun to diverge from the S&P 500 (SPY -0.2%) over the past couple of sessions, and not in a good way.
- The index of small caps has led the way in the big stock rally over the past year, outperforming the big cap gauge by more than 1000 basis points. Its most recent strong relative move has come since mid-September when the Fed backed away from the expected taper.
- Russell 2000 ETFs: IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
Oct. 17, 2013, 4:28 PM
- "We start to get a little queasy when we hit 19x," says BAML's Steven DeSanctis, unable to find bargains in any sector of the small cap universe.
- The Russell 2000 is up 29% this year, and 5.4% over the three months, easily cruising past the S&P 500's 21% and 2.7% gains, but the small cap's P/E ratio has risen to just over 18 vs. a long-term average of 14.9.
- The lofty valuation has BAML recommending clients swap out of U.S. growth for global growth as small caps generally have less exposure to international action.
- Small cap ETFs: IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK, IWO, VTWG, UKK, SKK, IWN, VTWV, UVT, SJH.
Sep. 29, 2013, 8:28 PM
- S&P 500 (SPY) futures -0.8% on mounting concerns of a partial U.S. government shutdown after the House voted to tie federal government funding to a halt on key provisions of Obamacare. Adding to worries is what may be the imminent collapse of the Italian government.
- DJIA (DIA) futures -0.7%, Nasdaq 100 (QQQ) -0.6%, Russell 2000 (IWM) -0.9%. Italian FTSE MIB futures (EWI) -1.2%.
- Japan's Nikkei is off 2% in the early going and Australia's ASX 200 is down 1%.
- Gold's little-changed and WTI crude oil is down 1.1% to $101.72.
- U.S. stock index ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB, DIA, DDM, UDOW, DXD, SDOW, DOG, QQQ, QQEW, TQQQ, QID, SQQQ, PSQ, QLD, QQQE, IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
- Japan ETFs: EWJ, NKY, EWV, EZJ, ITF, JSC, JPP, DXJ, SCJ, DFJ, FJP, JPNL, JPNS, DXJS, JGBT, JGBL, JGBS, JGBD.
- Australia: EWA, EWAS, KROO, AUSE, FAUS, AUD, AUNZ, FXA, GDAY, CROC.
Sep. 16, 2013, 9:51 AM
- Bearish pundits have their tails in the air thanks to Time's latest cover which features a bull with a party hat and shades on under the headline, "How Wall Street Won."
- The so-called "magazine cover indicator" has been a favorite of contrarians since print was invented, with Business Week's 1979 "Death of Equities" cover the granddaddy of all bell-ringers.
- Paul Macrae Montgomery is the best collector and recorder around for these incidents, and he says there's an 80% chance the market will top in a month and be lower a year from now. Don't be swayed by the equivocal nature of the article - which says another crash remains possible - it's the graphic image that's of most importance. He reminds Time signalled the epochal March 2009 bottom with its March 10 "Holding On For Dear Life" cover.
- Index ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB, QQQ, QQEW, TQQQ, QID, SQQQ, PSQ, QLD, QQQE, DIA, DDM, UDOW, DXD, SDOW, DOG, IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
Sep. 15, 2013, 8:37 PM
- S&P 500 (SPY) futures +1.1% following Larry Summers pulling out of the race to be Fed chief. Nasdaq 100 (QQQ) and DJIA (DIA) +1%.
- 10-year Treasury futures are up nearly a full point, translating into about a 10 basis point dip in the 10-year Treasury yield, which closed Friday at 2.88%.
- Eurodollar futures are partying, the December 2016 contract up a full 17 basis points - in other words, nearly one 25 basis point Fed rate hike has been erased on the Summers news. Still, at 97.33, the Dec. 2016 contract is pricing in nearly 250 bps in hikes between now and then. The Eurodollar market has always been a great repository of market angst, and to say the taper and Summers were making players nervous would be putting it mildly.
- The greenback is lower across the board, down about half a percent vs. the euro (FXE), pound (FXB), yen (FXY), swissie (FXF), and loonie (FXC), and off a full percent vs. the aussie (FXA).
- Precious metals are on the move as well, gold +1.7% to $1,330 per ounce, and silver +2.5% to $22.25.
- Stock index ETFs: IVV, SPY, VOO, RWL, SFLA, SSO, UPRO, SDS, SPXU, SH, EPS, RSP, BXUB, BXUC, BXDB, DIA, DDM, UDOW, DXD, SDOW, DOG, IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
- Long-dated Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
- Dollar ETFs: UUP, UUPT, UDN, UDNT.
- Short-duration Treasury ETFs: SHY, SHV, IEI, BIL, TUZ, FIVZ, DTUL, VGSH, DTUS, DFVS, DFVL, SST, ISTB, TBZ.
- Related currency ETFs: ERO, ULE, URR, EUO, DRR, EUFX, GBB, YCL, YCS, JYN.
- Precious metals ETFs: GLD, IAU, SGOL, PHYS, AGOL, DGL, UBG, DGP, UGL, DZZ, GLL, DGZ, UGLD, DGLD, GLDI, SLV, SIVR, AGQ, DBS, USV, ZSL, USLV, DSLV, SLVO.
Aug. 23, 2013, 2:34 PM
- "The small cap valuation story has also deteriorated a bit," writes Credit Suisse's Calvasina and Mahaffy, noting the relative ratio between small caps and mid caps has gotten back in line with the long-term average.
- A bigger issue though, is absolute valuations - small and mid cap stocks have become overvalued relative to large caps which themselves are overvalued.
- Bottom line: The entire equity market has a valuation problem and the valuation of small and mid caps is little better or worse.
- Small cap ETFs: IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
- Mid-cap ETFs: SCHM, RWK, FNX, MDY, IJH, VO, VXF, JKG, IWR.
Aug. 21, 2013, 8:03 AM
- Yesterday was the first session in more than three years which saw the Dow (DIA) decline while the Russell 2000 (IWM) rose more than 1.5%, according to Bespoke.
- Bullish or bearish? Small cap outperformance is commonly thought to signal the sort risk-appetite necessary for a bull market. The Russell 2000 has outperformed the Dow by nearly 1000 basis points over the last year with all of the gain coming since the bull move took off in mid-November.
- Small caps really started to widen their lead from late June - perhaps signaling the sort of over-exuberance necessary to set at least a temporary market top.
- Small cap ETFs: IWM, VTWO, EWRS, SRTY, TWM, RWM, TNA, URTY, UWM, TZA, SMLV, TWOK.
- Dow ETFs: DIA, DDM, UDOW, DXD, SDOW, DOG.
Jul. 9, 2013, 3:11 PM
State Street (STT) is competing aggressively on price with the launch of its Russell 2000 ETF (TWOK) - the fund will have an expense ratio of 0.12% vs. iShares' (BLK) IWM with expenses of 0.24%, and Vanguard's VTWO at 0.21%. In addition, SSgA is relaunching 3 existing ETFs after refitting them to Russell indexes. The SPDR Russell 3000 ETF (THRK) replaces the SPDR Dow Jones Total Market ETF (TMW), with expense ratio halved to 0.10%. The SPDR Russell 1000 ETF (ONEK) replaces the SPDR Dow Jones Large Cap ETF (ELR), with expense ratio halved to 0.10%. The SPDR Russell Small Cap Completeness ETF (RSCO) replaces the SPDR Dow Jones Mid Cap ETF (EMM) with expense ratio falling to 0.10% from 0.25%.| Jul. 9, 2013, 3:11 PM
Jul. 8, 2013, 3:54 PM
State Street (STT) looks to take on iShares' (BLK) dominant small cap ETF (IWM) with the Tuesday launch of the SPDR Russell 2000 ETF (TWOK). IWM currently has $23.3B in AUM and an expense ratio of 0.24%. This compares to other far smaller competitors like Schwab's SCHA at 0.08% and Vanguard's VB at 0.10%. Previous: Small cap stocks outpace the S&P 500. Other reasonably popular ETFs: IJS, IJR.| Jul. 8, 2013, 3:54 PM | 4 Comments
Jul. 8, 2013, 9:44 AMIf small caps truly lead than it's good news for the broader market. The Russell 2000 (IWM) - which crossed over 1,000 for the first time ever on Friday - hit another all-time high in early trade today, +0.3% to 1,009. The index is outperforming the SPY by about 330 bps YTD, after widening its lead in the market bounce over the last 2 weeks. | Jul. 8, 2013, 9:44 AM | 2 Comments
Jun. 20, 2013, 10:42 AMStocks continue to slide with the Dow (DIA -1.6%) at a session low and off 240 points just over an hour into the session. Among sectors, small caps (IWM -2.1%) are underperforming, as is energy (XLE -2.4%). WTI crude (USO -2.8%). In Europe, the Stoxx 50 is off 3.5%. Among emerging markets still open, Brazil is off 3%, but the Brazil ETFs (EWZ -4.7%), (BRF -6.4%) are faring even worse, their decline compounded by a 2% fall in the real (BZF). | Jun. 20, 2013, 10:42 AM | 3 Comments
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