Aug. 19, 2014, 8:59 AM
- Reversing a big YTD trend, U.S. investors pulled nearly $4B out of Europe-focused ETFs over the past week. Among the reasons, suggests Markit's Simon Colvin: Europe is seen as more exposed to Russian sanctions, anemic European growth, and a strengthening U.S. dollar. "The only certainty is that a growing portion of American investors think that their assets are better invested outside of Europe, something which wasn't the case six weeks ago."
- Interestingly, it's the "core" Eurozone countries like Germany (NYSEARCA:EWG) and France (NYSEARCA:EWQ) with which U.S. investors are least interested, while Italy (NYSEARCA:EWI) and Spain (NYSEARCA:EWP) have seen net inflows over the past three months.
- Europe equity ETFs: VGK, FEZ, IEV, HEDJ, EPV, EZU, FEU, FEP, UPV, ADRU, FEEU, EURL, EURZ, DBEU, IEUR, FIEU
Aug. 14, 2014, 6:46 AM
- Euro-Zone GDP failed to grow in the second quarter following 12 months of weak growth, causing European equity markets to fall and increasing pressure on the ECB to do more to boost growth and inflation.
- Data released this morning by the European Union's statistics office translates into 0.2% growth in annualized terms, down from the first quarter's 0.8% pace.
- The euro zone's three largest economies, which account for two-thirds of the region's €9.6T ($12.8T) GDP, all did not post any growth. German GDP shrank 0.2% from the first quarter and Italy's output fell at a similar pace. The French economy, the bloc's second largest behind Germany, stagnated for a second straight quarter.
- The region's next largest economies, Spain and the Netherlands, posted some growth but not enough to offset their larger peers.
- ETFs: FXE, RSX, VGK, EUO, EWG, FEZ, GREK, EWP, EWI, DFE, RUSL, ERO, RSXJ, IEV, ERUS, RUSS, EWL, HEDJ, EU, EWU, EPV, EUFN, EZU, EWD, NORW, EWQ, EPOL, EIRL, PLND, RBL, EWO, DRR, GXF, FEU, EWN, GUR, EWK, EDEN, FDD, EWGS, FEP, ESR, UPV, EUFX, PGAL, ULE, IFEU, DBGR, ENOR, ADRU, EWUS, EUDG, DXGE, FEEU, GERJ, URR, FGM, EFNL, EURL, FKU, FSZ, DXPS, RUDR, EURZ, DBEU, QDEU, IEUR, FIEU, EUMV, HEWG, SMEZ, QESP, DBUK, QGBR
Jul. 10, 2014, 7:12 AM
- S&P 500 (SPY), Nasdaq 100 (QQQ), and DJIA (DIA) futures are all off about 0.9% and Russell 2000 (IWM) down 2% as trouble brews in the EU periphery.
- Banco Espirito Santo - Portugal's largest listed bank - is off another 16% as its parent reportedly considers bankruptcy protection unless a deal can be worked out with creditors. Portugal broad market is down another 4.1%, bringing its 7-session slump to 11%.
- Previously: Portugal tumbles on bank worry
- Europe's Stoxx 50 (FEZ) is down 2%, led by Italy (EWI) -2.5% and Spain (EWP) -2.6%.
- The 10-year U.S. Treasury yield is down four basis points to 2.51% and gold catches a serious bid, up $20 per ounce to $1,344.
- ETFs: SPY, QQQ, SH, DIA, IWM, TZA, TNA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, IWC, UWM, TQQQ, VB, SPXL, QID, RSP, IJR, SQQQ, DOG, SLY, QLD, DXD, RWJ, RWL, URTY, EPS, UDOW, SCHA, TWM, SDOW, DDM, RWM, SRTY, SAA, BXUB, DWAS, VTWO, QQEW, QQQE, VIOO, SDD, SFLA, PZI, FDM, SPLX, QQXT, SBB, BXUC, WMCR, RSCO, JKJ, FYX, XSLV, EWRS, TWOK, SMLV, SPUU, PXSC
Jul. 7, 2014, 3:11 PM
- You need to look at more than the size of flows, says Deutsche's Sebastian Mercado, who instead relies on what he calls "flow trend formation." For example, noting that ETFs attracted $25B in a month is of little use, but a pattern of $1B of inflows every day for a month is a sign of a demand shift for that asset class.
- The bank is now publishing a Tactical Asset Allocation Relative Strength Signal report, and the latest one sees strong equity flows across all regions, particularly Europe and North America, more particularly still in periphery states like Spain (EWP) and Italy (EWI). Treasury and corporate bond flows are negative and the rally in gold has failed to attract much in the way of inflows into those ETFs.
- ETFs: AOA, GTAA, AOK, AOM, AOR, EPRO, RLY, DBIZ, GAL, MATH, GIVE
Jun. 30, 2014, 7:05 AM
- Spain's IBEX 35 (EWP) with a 0.7% decline is leading Europe's Stoxx 50 (FEZ) lower by 0.2%. Asia was mostly in the green, led by India (+1.25%), Shanghai (+0.6%), and the Nikkei (+0.45%).
- The 10-year Treasury yield is down one basis point at 2.53% and gold is lower by $6 per ounce to $1,314.
- ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, SFLA, SPLX, QQXT, BXUC, SPUU
Jun. 12, 2014, 12:04 PM
- Each ETF will track a single developed market and hold firms that have performed well in various market conditions and offer investors value while featuring low volatility.
- SPDR MSCI Australia Quality Mix ETF (QAUS), SPDR MSCI Canada Quality Mix ETF (QCAN), SPDR MSCI Germany Quality Mix ETF (QDEU), SPDR MSCI Japan Quality Mix ETF (QJPN), SPDR MSCI Spain Quality Mix ETF (QESP), and SPDR MSCI United Kingdom Quality Mix ETF (QGBR) all launched this morning when the market opened.
- All of the quality ETFs feature an expense ratio of 0.30%.
- Other ETFs following the selected 6 countries: EWU, FKU, DXPS, DBUK, EWP, DXJ, EWJ, NKY, DBJP, EZJ, EWV, JPNL, ITF, JPP, JPNS, HEWJ, FJP, EWG, DBGR, DXGE, FGM, HEWG, EWC, FCAN, EWA, AUSE, FAUS
Jun. 10, 2014, 7:29 AM
- “As I have written many times this year, this is not an investment strategy, but a job preservation strategy," writes Marc Ostwald of Monument Securities of the extraordinary move lower in EU periphery bond yields. "If these guys resist and bemoan poor credit quality, they will underperform their peers ... In the long run this is the road to the next crisis and ruination.”
- While the sovereign 10-year yields of Ireland and Spain have fallen below that of the U.S. (and Italy is close), they're still well above the 1.33% of Germany, so European fund managers can goose performance by continuing to buy the PIGS. Dancing while the music plays is ICAP's Phil Tyson: “I think that the bond market could go higher in the short term as the search for yield continues in an environment where ECB rate expectations are anchored with forward guidance having been strengthened."
- ETFs of interest: EWP, EWI, EIRL, GREK
Jun. 6, 2014, 7:32 AM
- Stock index futures are up slightly ahead of the nonfarm payrolls report due at 8:30 ET. Expectations are for job gains of 218K and a tick up in the unemployment rate to 6.4%.
- Europe continues to gain following the ECB's move into negative rate territory yesterday. Again, it's the periphery leading the way, with Spain (EWP) ahead 1.2% and Italy (EWI) up 0.8% vs. the broader Stoxx 50 (FEZ) up 0.5%.
- Asia was little-changed overnight.
- THe 10-year Treasury yield is down one basis point at 2.57% and gold is flat at $1,252 per ounce.
- ETFs: SPY, QQQ, SH, DIA, SSO, SDS, PSQ, VOO, IVV, SPXU, UPRO, TQQQ, SPXL, QID, RSP, SQQQ, DOG, QLD, DXD, RWL, EPS, UDOW, SDOW, DDM, BXUB, QQEW, QQQE, SFLA, QQXT, SPLX, BXUC, SPUU
Jun. 5, 2014, 10:35 AM
- Interesting action in the markets finds most doing a complete reversal of their knee-jerk response following the ECB rate cut and early part of the Draghi press conference (where he seemed to be laying the groundwork for QE).
- The euro (FXE) has turned around more than 100 pips and gone green on the session. Germany's DAX (EWG) and London's FTSE (EWU) have turned lower, though the periphery (EWI, EWP) is hanging on to gains. The 10-year Treasury yield - which jumped to 2.64% - has returned to 2.59%. TLT -0.1%, TBT +0.2%
- Showing little reaction in the immediate aftermath of the ECB action, gold is now moving noticeably higher at $1,253 per ounce. GLD +0.75%
- Previously: Negative rates not the end of moves for the ECB
Jun. 5, 2014, 7:55 AM
- The Stoxx 50 (FEZ) is up 0.8% after being about flat ahead of the ECB rate decision, at which the central bank cut all three of its benchmark rates, including taking the deposit facility rate into negative territory.
- Italy (EWI) with a 1.3% gain and France (EWQ) ahead 1% lead the way.
- The euro (FXE) tumbles about 40 pips, now off 0.3% on the session and buying $1.3563.
- Europe equity ETFs: RSX, VGK, EWG, FEZ, GREK, EWP, EWI, DFE, RUSL, IEV, RSXJ, EWL, ERUS, EWU, RUSS, EPV, EZU, EWD, HEDJ, NORW, EWQ, EPOL, EIRL, PLND, EWO, RBL, GXF, EWN, FEU, EWK, FDD, EWGS, FEP, EDEN, UPV, EWUS, DBGR, PGAL, ADRU, ENOR, GERJ, DXGE, FEEU, FGM, EURL, FKU, EFNL, EUDG, DXPS, FSZ, EURZ, FIEU, RUDR, DBEU, HEWG, DBUK
- Euro ETFs: FXE, EUO, ERO, DRR, EUFX, ULE, URR
- ECB chief Mario Draghi's press conference begins at 8:30 ET.
May 23, 2014, 2:48 AM
- S&P has upgraded Spain's credit rating for the first time since stripping the country of its AAA grade in 2009, increasing its assessment to BBB from BBB- and saying the outlook is stable.
- "The upgrade reflects our view of improving economic growth and competitiveness as a result of Spain’s structural reform efforts since 2010," S&P said.
- The agency also increased its 2014-2016 GDP growth outlook for Spain to 1.6% from 1.2%.
- S&P's upgrade follows similar action from Fitch and Moody's over recent months.
- ETF: EWP
May 13, 2014, 9:15 AM
- "Investors are all aboard the periphery train, and there's now simply no margin for error," says BAML's Obe Ejikeme, commenting on his firm's fund manager survey for May. A net 36% of the respondents say they're overweight eurozone stocks, up from 30% in April, with the equities of Spain (EWP) and Italy (EWI) are preferred to those in the core.
- Ejikeme also calls long bets in EU periphery debt the most crowded traded globally. Indeed. Spanish 10-year debt is now priced to yield 2.93%, Italy 2.97%, Ireland 2.67%. As comparison, U.S. 10-year Treasurys yield 2.63%.
- ETFs: VGK, FEZ, DFE, IEV, EPV, EZU, HEDJ, GXF, GUR, FEU, FDD, FEP, ESR, UPV, ADRU, FEEU, EURL, EUDG, EURZ, FIEU, DBEU
May 2, 2014, 4:02 AM
- French manufacturing PMI fell to 51.2 (flash 50.9) in April from 52.1 in March.
- Output and new orders rose at weaker rates and employment dropped slightly, while input and output prices declined at sharper rates.
- "With panelists reporting a continued cautious outlook among clients, the recovery seems to be struggling to gain traction," says Markit. "Until confidence begins to strengthen, prospects for the sector look set to remain subdued."
- The CAC 40 (EWP) is -0.45%. (PR)
Apr. 25, 2014, 11:53 AM
- The EU periphery upgrades continue, with Spain's credit rating upped to BBB+ from BBB by Fitch. The outlook is stable.
- "Risks to Spain's creditworthiness have decreased since the sovereign was downgraded to 'BBB' in June 2012. Financing conditions have improved, the economic outlook is more certain, and the risk of Spanish banks posing an additional burden on the sovereign has diminished."
- "Spain's fiscal track record over the past two years has been strong, in our opinion. Its headline fiscal deficit (excluding bank support) declined by 2.5% of GDP in 2012-13, despite a 2.2% drop in nominal GDP over the same period."
- EWP -1.1% today, up 35% Y/Y.
Apr. 24, 2014, 5:03 AM
Apr. 11, 2014, 3:16 AM
EWP vs. ETF Alternatives
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