All posts by MarketsMuse Staff Reporter

ETF News, Global Macro Strategy

Global Macro: Is The Darling of EM Faltering?; How To Trade It..

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MarketsMuse ETF and Global Macro update takes a look at India for those following the two leading ETFs in the space, the $2.3 billion WisdomTree India Earnings Fund (EPI. C-73) and the $1.9 billion iShares MSCI India ETF (INDA. C-92), and introduces a global macro perspective that adds a different dimension via a brief excerpt from today’s a.m.  edition of Sight Beyond Sight and courtesy of Rareview Macro LLC a.m. notes

India: The Darling of EM Faltering

In a very rare occurrence in India, where investors are two-times overweight the equity market benchmark, 49 of the 50 names in the National Stock Exchange CNX Nifty Index (NIFTY Index -2.81%) closed negative. Not only has the ratio of India to Brazil (NIFTY/IBOV) now retraced almost 50% since its mid-2012 ascent higher, but it remains one of the best representations globally of the unwind of the commodity importer vs. exporter strategy that dominated the deflation headlines from July 2014 to February 2015.

Here is an updated version of our favorite representation. This is the Indian SENSEX versus Brazilian Bovespa overlaid with the inverse of WTI crude oil. As you can see, without Brazil even being opened today yet, the Indian leg has taken that ratio down below the 200-day moving average.

For the avoidance of doubt, which is very high in the professional community when it comes to India, after last night’s price action the equity markets are now formally in a technical correction (i.e. -10%) as the NIFTY is -11.36% off its March high. Additionally, the major benchmarks are now negative on the year in both US dollar and local currency (INR) terms. Optically, next to Turkey, India is the only other major emerging market that is negative year-to-date.

 

Sight Beyond Sight® is a global macro trading newsletter written daily by Neil Azous. With close to two decades of institutional experience across asset classes, Neil interprets the day-to-day economic, policy and strategy developments and provides actionable trading ideas for investors.

ETF News, Tech Talk

BNY Mellon Introduces New ETF Tool

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MarketsMuse blog update profiles The Bank of New York Mellon Corporation aka BNY Mellon, and their introducing a new ETF negotiation tool. This update is courtesy of Asset Servicing Times’ article, “BNY Mellon launches new ETF negotiation tool“,  with an excerpt below. 

BNY Mellon has introduced a new automated process to aid authorised participants in the creation and redemption of exchange traded funds (ETFs).

The new process allows these participants to use BNY Mellon’s ETF centre to conduct propositions and negotiations on underlying data for ETF baskets with a fund sponsor.

It is designed for large financial institutions that are chosen by such a sponsor to obtain the necessary assets for creating or redeeming an ETF.

Usually, participants will have to go through more than one institution to do this, before shares are transferred to a custodian bank.

The new system is designed to offer a more flexible and more efficient environment for negotiating ETF baskets.

Steve Cook, global head of ETF services at BNY Mellon, said: “Helping authorised participants become more efficient ultimately benefits the other participants in the ETF marketplace, ranging from issuers to those in the secondary trading market.”

To continue reading about this new ETF negotiation tool, click here.

ETF News, People Profiles

Goldman Sachs Readies ETF Launch

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MarketsMuse blog update profiles Goldman Sachs preparing for a launch of its own ETFs. Goldman Sachs is the largest U.S. investment bank and they are finally going to make the move to become a huge player in the ETF industry.  The firm has completed all its necessary paperwork with the SEC as of May 4th for its six ETFs. These six new ETFs include: Goldman Sachs ActiveBeta International Equity ETF (GSIE), Goldman Sachs ActiveBeta Emerging Markets Equity ETF (GEM), Goldman Sachs ActiveBeta Europe Equity ETF (GSEU), Goldman Sachs ActiveBeta Japan Equity ETF (GSJY), Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) and the Goldman Sachs ActiveBeta U.S. Small Cap Equity ETF (GSSC). This MarketsMuse blog update is courtesy of ETFTrends’ Tom Lydon and his article, “Goldman ETFs Near Liftoff“, with an excerpt below. 

ETFTrends-logo

Goldman Sachs (NYSE: GS), the largest U.S. investment bank, is getting closer to launching its own exchange traded funds.

In a filing with the Securities and Exchange Commission dated May 4, New York-based Goldman Sachs revealed tickers and fund managers for its six “ActiveBeta” ETFs as well as tickers for its five passively managed ETFs.

Among Goldman the managers for the ActiveBeta ETFs are “Steve Jeneste, a managing director most recently oversaw portfolio management of macro and multi-asset strategies. Another is Raj Garigipati, vice president, who most recently served as chief risk officer for Goldman’s QIS unit,” reports Chris Dieterich for Barron’s.

To continue reading about Goldman Sachs preparing  for the launch of its six “ActiveBeta” ETFs, click here.

 

Tech Talk

What’s Next? Another Dark Pool: LSE Jumps In via Plato’s Retreat

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MarketsMuse.com Tech Talk update profiles the latest news flash for FinTech wonks: Whilst the securities industry landscape continues to debate the “dark pool vs. lit market” topic, the London Stock Exchange (LSE) is taking a chapter from the behometh brokerdealer universe with their own scheme to introduce a dark pool, but the regulated LSE proposes to make their platform a ‘non-profit utility”. Below is courtesy of extract from Bloomberg LP reporting. MarketsMuse Editor’s note: Our MM title editor apologizes to those who might be confused by the reference to the once notorious Manhattan NY gathering place for those seeking to keep their wild side ‘dark’..but we thought it was a fun title nonetheless..
 Continue reading →

ETF News

Rookie ETFs Of The Year: Two New ETFs That Are Standouts In 2015

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MarketsMuse blog update profiles two ETFs that have become standouts so far this year. The ETFs iShares Exponential Tech ETF (XT) and SPDR DoubleLine Total Return Tactical ETF (TOTL) have been dubbed with the title according to Zacks’ Neena Mishra in her article, “2 New ETFs with Big Potential“, excerpts from the article are below. 

The ETF industry continues to grow exponentially, with a record $96 billion in global inflows during the first quarter, up more than 100% from a year ago. More than 70 ETFs have been launched in the US so far this year, taking the total number of ETFs to 1702 and total assets to over $2.1 trillion.

Below, we highlight two ETFs launched this year that stand out from the rest and in our view hold a lot of potential.

iShares Exponential Tech ETF (XT)

This ETF has attracted almost $647 million in assets since its inception in March, making it one of the most successful ETF launches. Investing in innovative technologies that have the potential to transform our lives is a very exciting concept. Further, this ETF includes not only developers but also users of promising technologies. So the coverage extends beyond the technology sector.

The idea for this ETF came from the famous financial advisor Ric Edelman and it is understood that some of the assets in this ETF came from his clients. Investors should note some of these disruptive technologies stocks have been quite hot lately and so this ETF is not really attractive looking at the valuation but companies focused on cutting edge technologies definitely have the potential to deliver superior return over time and this ETF could be a solid choice for long-term investing.

SPDR DoubleLine Total Return Tactical ETF (TOTL)

Bond markets have confounded most analysts and investors of late. Yields plunged last year when almost everybody was expecting them to go up. Over the past few months, the bond market has seen erratic swings and we have also seen substantial flattening of the yield curve.

As the Fed gets ready to raise interest rates, shorter-term rates have been going up but longer-term rates have actually declined, thanks mainly to massive demand from foreign investors since interest rates in Europe and Japan are so low.

To continue reading about these two standout new ETFs, click here

Fixed Income, Tech Talk

Corporate eBond Trading Chapter 8: InterDealer Broker GFI Up at Bat With Odd-Lot System

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MarketsMuse.com Fixed Income & Trading Tech update is without a rating and instead, takes a long view towards this week’s announcement from inter-dealer broker GFI Group launch of an electronic service for “dealers only” to trade odd lots of corporate bonds. For those not in the know, “odd-lot” is generally under $1million notional value.

This is not to suggest that GFI’s launch represents anything innovative; more than a few electronic platforms intended to make trading in corporate bonds easier have started up and since failed throughout the past 20 years, and GFI’s recent announcement is on the heels of six other announced initiatives during the past 3 years alone. The fact that GFI is aiming at the so-called underbelly or odd-lot marketplace puts them in competition with among others, multiple dealer pages on Bloomberg’s terminal farm, entrenched player MarketAxxes, and to a much lesser extent, the NYSE Bond system (“NYSE BONDS”) a platform that was first introduced around the same time as the Ford Edsel.

More interesting than the below “news flash” courtesy of TradersMagazine, readers following the “electronification of corporate bond trading” should borrow back from time and reflect on a report published in 2013 by McKinsey & Co. & Greenwich Associates (click on image below). Despite its aging, the white paper remains evergreen.

Electronic trading in the fixed-income market is about to take another leap into the digital age for those traders looking to execute non-standard order sizes, or odd-lots. GFI Group has announced a new electronic trading platform for odd lot corporate bonds in the U.S. Historically, odd lots have been traded via telephone and voice brokering. GFI’s new offering, available via CreditMatch, serves the dealer-to-dealer market for corporate bonds with a notional value of less than $1 million. Odd lot transactions represent almost 90% of the number of trades in the interdealer corporate bond market and almost 20% of the notional amount traded, according to FINRA. Effective today, the new service consists of an end of day odd lot matching session that provides instant executions via CreditMatch, GFI’s electronic trading system for corporate bonds and derivatives. The service will be extended into a fully executable Central Limit Order Book (CLOB) during the third quarter of 2015. Trades will be electronically posted to FINRA’s Trade Reporting and Compliance Engine (TRACE) and cleared by Pershing.

ebond trading marketsmuse mckinssey report

 

ETF News

Homebuilding ETF Is Falling Down

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MarketsMuse blog update profiles speculation surrounding SPDR S&P Homebuilders exchange-traded fund. This ETF reach an eight-year high in February but since then has fallen dramatically. Now investors are taking notice and are trying to make a quick exit. This MarketsMuse blog update is courtesy of Callie Bost and Jennifer Kaplan of Bloomberg Business and their article, “Investors In This Homebuilder ETF Are Heading for the Exits“, with an excerpt below. 

Investors in homebuilding shares are heading for the door.

Speculators in the SPDR S&P Homebuilders exchange-traded fund have pulled a record amount of cash in April, abandoning the ETF known by its ticker XHB after it reached an eight-year high in February. The fund has retreated 4.8 percent since then.

Traders are doubting equity gains have room for improvement as mixed economic reports muddy the outlook for further growth in the industry. The Federal Reserve is moving closer to raising interest rates, adding to concerns just as homebuilders enter the busiest time of the year.

“Housing stocks are in an interesting position right now,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees $3 billion, said by phone. “We’re in a bit of a logjam for multiple factors. Until this logjam breaks, it’s going to be hard for national homebuilders to have sustained outperformance.”

In April, traders removed $376 million from the fund, the largest monthly outflow since the ETF started trading in 2006. The SPDR S&P Homebuilders fund tracks stocks like Toll Brothers Inc. and D.R. Horton Inc. as well as home-improvement companies including Aaron’s Inc., Tempur Sealy International Inc., and A.O. Smith Corp.

To continue reading about the fall of the homebuilder ETF, SPDR S&P Homebuilders exchange-traded fund, click here

ETF News

ETFs Hit New Milestone As Individuals Put More Into ETFs Than Mutual Funds

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MarketsMuse blog update profiles the new milestone exchange-traded funds have reached as now more than ever, individual investors have pouring more money into ETFs than traditional mutual funds. This MarketsMuse blog update is courtesy of an analysis done by Broadridge Financial Solutions and found in the Wall Street Journal’s article, “A New Milestone for ETF Adoption“, with an excerpt below.

Individual investors have a lot more money invested in traditional mutual funds than in exchange-traded funds. But as people continue pumping dollars into ETFs, their ETF holdings grew by more in dollar terms than their mutual-fund investments over the year through March—apparently for the first time—according to an analysis by Broadridge Financial Solutions.

That conclusion is based on the company’s tally of fund and ETF holdings in accounts at “retail” companies, including full-service and discount brokerages, which cater to individual investors and their advisers. Broadridge, based in Lake Success, N.Y., sells communications and technology services to financial-services companies.

Individual-investor holdings of ETFs grew by $267 billion in the year through March, a 24.4% increase, according to Broadridge. Over the same period, individuals’ holdings of long-term mutual funds grew by $255 billion, or 5.6%, the company said.

“This is the first period in which we’ve seen that the actual dollar amount in the retail channel is higher in the ETF space than in the mutual-fund space,” says Frank Polefrone, senior vice president at Access Data, a Broadridge unit in Philadelphia. ”It’s a big shift over what we’d seen a year ago or two years ago.”

Broadridge has been tracking the data for more than four years.

To continue reading about the latest ETF milestone, click here.

ETF News

Twitter’s Weak Q1 Jolts Social ETFs

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MarketsMuse blog update profiles the disappointing Q1 for Twitter and the impact it is having on social media ETFs such as Renaissance IPO ETF (IPO), Global X Social Media Index ETF(SOCL) and ARK Web x.0 ETF (ARKW). This MarketsMuse update is courtesy of Zacks Equity Research and their article, “Twitter Tweets a Weak Q1 & Soft View, ETFs in Focus“, with an excerpt below. 

On April 28, Twitter (TWTR) came up with a weak Q1 and a disappointing guidance. The social networking site then saw a freefall in its share price as it failed to live up to many investors’ expectations.


Q1 in Detail

The company’s first-quarter 2015 non-GAAP loss per share (including the stock-based compensation expense) of 20 cents was a penny ahead of the Zacks Consensus Estimate. Excluding the stock-based compensation expense, the company earned 7 cents per share on a pro forma basis.

Revenues of $436 million in the quarter fell shy of the Zacks Consensus Estimate of $455 million. ‘A lower-than-expected contribution from newer direct response marketing products’ was held responsible for lower-than-expected revenues. However, revenues grew about 74% year over year.

Market Impact

This subdued performance dampened investors’ mood as the stock was severely beaten down in recent trading sessions. Following the earnings leak on April 28, about 40 minutes ahead of the closing bell, Twitter shares saw a landslide, plunging over 18% for the key trading session of April 28 on about fourth times the regular volume.

Shares slid about 8.9% on April 29. However, after such a massive sell-off for consecutive two days, Twitter stock recouped 0.94% after hours. Year to date, the stock is still up 8.3%.

Twitter does not have a sizable exposure in the overall ETF world with only three ETFs – Renaissance IPO ETF (IPO), Global X Social Media Index ETF(SOCL) and ARK Web x.0 ETF ((ARKW – ETF report)) – having major exposure of 8.17%, 3.66% and 3.20% respectively, at present. Such a huge fall in one of the major components should impact these ETFs.  Below, we have discussed these three funds in detail:

To continue reading about Twitter’s disappoint Q1’s impact on ETFs, click here

People Profiles, Tech Talk

Byrne’s Bitcoin Exchange Files $500 Million Offering of Virtual Shares

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MarketsMuse.com Tech Talk update profiles the latest development regarding Overstock.com’s CEO Patrick Byrne  plan for a cryptosecurity trading system “for brokerdealers” only and akin to the array of ECNs and ATS platforms that Fintech aficionados and broker-dealers  are already accustomed to.

The headline:

Overstock looks to issue Bitcoin-style stocks via new trading system; may issue up to $500 million in stock through blockchain-style technology

Overstock, the online retailer building a crypto-securities exchange, has revealed that it may issue up to $500 million in stock through blockchain-style technology.

Last year Overstock CEO Patrick Byrne hired developers and lawyers in an effort to create a platform – dubbed ‘Medici’ – that could use the core blockchain technology to create a cryptosecurity trading system, in which computer algorithms are used to trade virtual stocks issued by public companies.

The firm has now filed a prospectus related to the sale of securities with the Securities and Exchange Commission, adding: “We may decide to offer any of the securities described in this prospectus as digital securities, meaning the securities will be uncertificated securities, the ownership and transfer of which are recorded on a cryptographically-secured distributed ledger system using technology similar to (or the same as) the distributed ledger technology used for trading digital currencies.”

The prospectus says that these digital securities would not be traded on any existing exchange but on a specific system registered with the SEC as an ATS open only to subscribers that agree to trade exclusively through vetted broker dealers.

For the full story from Finextra.com, please click here

ETF News, People Profiles

CEO Believes The ETF, JETS, Will Have A Smooth Take Off

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MarketsMuse blog update profiles U.S. Global Investors CEO’s, Frank Holmes, interview with Forbes’ Trang Ho. Frank Holmes’s company is launching a new airline ETF, JETS, tomorrow, Thursday, April 29, 2015. After so many past airline ETFs have crashed and burned, Holmes highlights how JETS is different. This interview is courtesy of Forbes’ article, “Why This CEO Believes New Airlines ETF Will Soar Even Though Its Predecessors Went Down In Flames” with an excerpt below. 

Frank Holmes, the CEO and chief investment officer of U.S. Global Investors, believes he can soar where others went down in flames. Holmes is launching a new airlines exchange traded fund on the stock market Thursday — U.S. Global Investors Jets ETF (JETS) — even though its predecessors were shuttled to ETF heaven for lack of investor interest. His San Antonio, Texas-based mutual fund firm oversees $927 million in assets.

Guggenheim Airline ETF (FAA), which rolled out in January 2009, was canceled in March 2013 after attracting only $21 million in assets. Direxion Airline Shares Fund (FLYX) was grounded in October 2011 only 10 months after take off. Its $3 million in assets were peanuts compared to the $25 million to $30 million needed for an ETF to break even.

Why did you launch this ETF?

Holmes: We believe the time is right for an airline ETF.  Thanks to wide-ranging structural changes in the airline industry, both domestic and international airlines are currently seeing strong growth in profits as well as demand. Although airlines have undoubtedly benefited from falling fuel prices—airlines’ single greatest operating expense—other important factors are also at work, which enable them to remain profitable in a highly competitive industry.

On a personal note, after flying more than 100 times last year, and over 8 million miles for the past 25 years, I noticed that all the new fees associated with flying began adding up. That’s when I thought to myself, if I can’t beat them, I might as well join them.

To continue reading this interview from Forbes, click here

Global Macro Strategy, People Profiles

Global Macro Trading: Why It’s Time to Stop Hating Apple Inc

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MarketsMuse.com Global Macro update necessarily touches on the hyperbole and couch quarterbacking connected to yesterday’s earnings announcement from Apple Inc ($AAPL), which included a big bump in planned corporate share buyback and increased dividend.

Our editors were particularly entertained by below extract from today’s edition of global macro trading commentary produced by Neil Azous, the Founder and Managing Member of Rareview Macro LLC and publisher of “Sight Beyond Sight”. During the past year, and notwithstanding a focus on thematic, macro-style strategies, Azous has published a selection of comments re $AAPL which have proven remarkably prescient. Below snippet is merely a teaser to a more detailed defense of Apple, and the same edition includes a Rareview look at “Gold Terrorists.”

(LATE POST:CNBC staffers were apparently so tickled by the Apple comments from Azous (and specific recommendation below), they demanded that Azous share his tongue-in-cheek comments on air…the video clip is below)

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

“…On a personal note, we would encourage those professionals who love to hate AAPL to book themselves a series of therapy appointments. It is ok to spend $10,000 and tell a stranger that you are “angry”.

We recommend one session each for the following 10 “issues” for you to work through. In fact, see if you can haggle yourself a discount for a pre-paid 10-pack of therapy sessions.

1. You are “angry” about the fact that their China revenues went to $17 bln from $10 bln and sales in China surpassed the US.

2.You are “angry” about the 70% year over-year growth rate in a country that is supposed to be in a hard landing.

3.You are “angry” about the China stock market impact, i.e. the $4 trillion in new market cap that could be put towards a new iPhone or Watch, and that AAPL is now geared to China.

To read the entire a.m. edition of “Sight Beyond Sight”, including commentary focused on “Gold Terrorists” and the outlook for yellow metal within the context of a sensible investment portfolio, please click here. (Subscription is required; Free Trial is available)….

ETF News

The Real Driver Behind China ETF Action: Column A and Column B

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MarketsMuse.com ETF update profiles the real driver behind the surge in China-focused exchange-traded funds courtesy of below extract from 28 April a.m. column by Todd Shriber of ETFtrends.com “Surprising Drivers of the A-Shares ETF Surge.”

It is not a secret that exchange traded funds holding Chinese equities, both A-shares trading on the mainland and Hong Kong-listed H-shares, have recently been delivering staggering returns.

Over the past month, the top 13 non-leveraged ETFs are all China funds, according to ETFScreen.com. That group includes 4 A-shares ETFs, an impressive number considering there are just seven such funds trading in the U.S. Year-to-date, seven of the top 11 non-leveraged ETFs are China funds, four of which hold A-shares.

Beijing-controlled companies have been driving the Shanghai Composite higher, creating a divergence between that benchmark index and the Shenzhen Stock Exchange Composite Index. (See Dec 2014 ETFtrends.com for background)

“The explanation for this divergence revolves around State Owned Enterprises,” said Rareview Macro founder Neil Azous in a note out Monday. “The Shanghai Index is composed of ~68% SOE and ~32% non-SOE whereas the Shenzen Index is only 22% SOE and 78% non-SOE.”

Granted, it is just a small data set, but over the past week the SOE-heavy ASHR and PEK have performed in-line with the Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (NYSEArca: ASHS) as each have raced to all-time highs.

Azous notes that speculation about China’s plans to possibly reduced the number of SOEs via mergers has contributed to the rally. For example, there is speculation that PetroChina (NYSE: PTR) and China Petroleum & Chemical could be merged to create that country’s equivalent of Exxon Mobil (NYSE: XOM). Those stocks combine for almost 1% of ASHR’s weight.

For the entire article by ETFtrends.com Todd Shriber, please click here

ETF News

Apple Low Sales Show In Tech ETFs

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MarketsMuse blog update profiles iPhone company’s, Apple, lacking in sales even with the new iPhone 6 and the recent release of the iWatch, effecting the tech ETFs. This MarketsMuse blog update is courtesy of ETFTrends’ Todd Shriber’s article “Ahead of Earnings, no Love for Apple ETFs”, with an excerpt from ETFTrends below.

ETFTrends-logoApple (NasdaqGS: AAPL), the world’s largest company by market value, reports fiscal second-quarter earnings after the close of U.S. markets Monday with analysts expecting per share earnings of $2.16 on revenue of $56.1 billion.

Should the reported numbers be close to or in-line with those estimates, Apple’s second-quarter results will lag the $3.06 per share on sales of $74.6 billion reported in the fiscal first quarter, turning investors’ attention to iPhone 6 and iPhone 6 Plus sales, Apple Watch comments and the company’s plans to return capital shareholders.

Apple reinstituted its dividend in the third quarter of 2012 after a 17-year hiatus. Since reintroducing the payout at 37.8 cents per share per quarter, Apple’s dividend has grown at an impressive clip to 47 cents a share per quarter.

It is not a stretch to say few companies’ earnings reports are as closely monitored and scrutinized as Apple’s, but even with the fervor leading up to the iPad maker’s latest batch of quarterly results, investors have been shying away from exchange traded funds with hefty allocations to the stock.

To continue reading about the fall of Apple’s sales and the effects it has on tech ETFs from ETFTrends, click here.

ETF News

Solar ETFs Continue to Rise Thanks to China

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MarketsMuse blog update profiles solar ETFs such as Guggenheim Solar ETF (NYSEARCA:TAN) and Market Vectors Solar Energy ETF (NYSEARCA:KWT) bright future thanks to China’s clean energy drive. This update  is courtesy of Seeking Alpha’s article, “China’s Clean Energy Drive Brightens Solar Power ETFs” by ETFTrends reporter, Tom Lydon, with an extract below.

China revealed a huge surge in photovoltaic panel installations over the first quarter, a typically slow season for the industry, and if the country maintains its pace, it could portend a strong year for solar stocks and sector-related exchange traded funds.

Year-to-date, the Guggenheim Solar ETF (NYSEARCA:TAN) jumped 40.8% and the Market Vectors Solar Energy ETF (NYSEARCA:KWT) increased 30.3%.

On Monday, the China National Energy Administration announced that the country added 5.04 gigawatts of solar capacity, or just shy of France’s entire solar capacity, in the first three months of the year, Bloomberg reported.

China is planning to install as much as 17.8 gigawatts of solar power this year, or two-and-a-half times the capacity added by the U.S. in 2014, as part of its aggressive plans to cut carbon emissions. For instance, the country’s recent move away from small coal plants will avoid the annual release of as much as 11.4 million metric tonnes of carbon dioxide, which could help cut emissions for the first time in over a decade, Today Online reports.

Chinese companies make up 22.9% of TAN’s underlying holdings and a hefty 38.4% of KWT’s portfolio.

To continue reading about the effects that China’s push for clean energy has on the solar ETFs, click here.

ETF News

Pakistan ETF: Another First For Frontier Market ETFs

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MarketsMuse.com ETF update shines light on Pakistan, as the timing of the launch of the first Pakistan-focused exchange-traded fund in the U.S. is remarkably fortuitous. U.S.-based ETF provider Global-X is launching the ETF today on the New York Stock Exchange with ticker symbol NYSE:PAK. Below extract courtesy of WSJ Frontiers reporter Dan Keeler

The fund joins a growing list of single-country frontier-market ETFs, including Global-X’s Argentina and Nigeria funds, as well as Market Vectors’ Vietnam fund. Jay Jacobs, research analyst at Global X Funds, says: “With the launch of the Pakistan ETF, investors now have access to one of the largest, most liquid frontier-market countries.”

China’s launch on Monday of a massive infrastructure-spending plan in Pakistan has brought considerable attention to the South Asian frontier market. Chinese President Xi Jinping announced and launched a $28 billion package of infrastructure deals that will form part of the so-called China Pakistan Economic Corridor.

Last weekend, Pakistan’s Planning Minister Ahsan Iqbal said the total Chinese investment into Pakistan would reach $46 billion.

China’s recently-announced colossal investment plan is not the only potentially market-moving news for Pakistan this week. Investment Bank Renaissance Capital yesterday described the country as an “undervalued reform story”, noting that the government is living up to its privatization promises—including its recent record-breaking sale of its stake in private sector banking giant HBL—and delivering reforms that should enhance stock valuations.

The full report from WSJ can be found via this link

People Profiles, Tech Talk

Symphony Singing As Ex-Reuters CEO Joins Board in Battle v. Bloomberg

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MarketsMuse.com Tech Talk aka Fintech update profiles the latest from Symphony, the brokerdealer-backed financial communications program that is looking to make the Bloomberg terminals (or at least their most-used messaging application) mute. This David v. Goliath type battle pitting well-backed upstarts against the ubiquitous Bloomberg LP could become a trend among other aspiring fintech, trading system and specialty financial data providers when considering last week’s snafu that, for a few hours, rendered the Bloomberg LP terminal farm “tradus interruptus” across the globe (albeit, the fix was made prior to the opening bell of US markets.)

Tom Glocer
Tom Glocer

As spotted first by of all places, the NY Post, “Tom Glocer, former CEO of Thomson Reuters and a managing partner of Angelic Ventures, is joining Symphony’s board of directors, according to a person directly familiar with the company’s plans (according to the NY Post).”

Symphony, which received a $66 million investment last year from 15 financial companies has been seen as a viable alternative to the $24,000-a-year Bloomberg terminal.

The company’s backers include a who’s who of Wall Street financial companies: Bank of America Merrill Lynch, BNY Mellon, BlackRock, Citadel, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Jefferies, JPMorgan, Maverick, Morgan Stanley, Nomura and Wells Fargo.

Last fall, these companies contributed $66M to finance Symphony, and using that money, purchased Perzo, a company that was building a secure communications platform. After the purchase, they named Perzo founder David Gurle as Symphony CEO.

In addition to providing encrypted chat services, Symphony doesn’t store any communications as a third party, and allows a bank’s compliance officers to stop chats from leaving the company — an increasingly important factor for banks who are seeing chat records in court papers.

The addition of Glocer is only the latest of alum of the news and financial data company to join Symphony.

David Gurle, Symphony’s founder and CEO, was global head of collaborative services at Thomson Reuters, and worked on the company’s chat tool, according to the company’s Web site.

In addition to Gurle, there’s Eran Barak, Symphony’s global head of business operations, and Koray Oztekin and Ann Demirtjis, who do product management, according to the company’s Web site.
At least four other Symphony employees in business development have formerly worked at Thomson Reuters, according to LinkedIn.

Symphony is already in wide use at Goldman Sachs, which led the round of funding last year. The service is expected to be broadly rolled out to Wall Street by July.

Strike Price

AAPL in Advance of Earnings: A Truly Smart Options Strategy

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MarketsMuse.com Strike Price update takes a swipe at the plethora of sell-side analysts already dueling on air in advance of Apple Inc.’s April 27 quarterly earnings release (folks who will be proffering their respective EPS outlook post mortems and assortment of “consensus” talking points and take-aways after Tim Cook steps away from the conference call microphone). Instead, our MarketsMuse Option mart experts decided to share a uniquely thoughtful trade strategy for those fluent in options and agnostic as to the short-term stock price impact of mundane metrics that include a fresh look at Apple Watch orders and backlog of orders, or whether revenue reported conformed to the general consensus of Wall Street researchers.

The thoughtful idea is only for truly macro-friendly traders and professional investors, not for those who maintain “a longer-than-before-lunch-but before-the closing bell” approach to investment management. The AAPL  options idea in question (based on and intended to express a positive view on the company’s share price over medium-to-longer-term) is rare, as it is exclusively focused on a thesis that is driven by intellectual, macro-style rational reasoning, which requires one to embrace a disciplined approach to the overall investment process.

In the case of the noise already surrounding AAPL earnings, the idea is courtesy of widely-cited-by-mainstream media (and frequent MM contributor) Neil Azous, the principal of global macro think tank Rareview Macro and publisher of the investment newsletter Sight Beyond Sight. It starts with distilling the jibber jabber that is typical to CNBC guest bloviators and pontificaters and discounts the emotions of momentary price ticks  based on whether the Apple Watch will soon be followed by an Apple Car. Instead, the Alpha capture Apple of an idea is based on expert fundamental analysis, a global perspective that is very similar in style to the 2 prior Apple Inc-related ‘calls’ that Azous advanced in Feb and March of this year  (re: Apple Swiss Franc bond issuance and March (AAPL / GOOG options trade).

Without further ‘background’, the trade idea makes for great reading by option market intellects, especially when considering that the expert in question is considered to be a Hedge Fund Industry Rising Star (nominee for Institutional Investor’s 2015 award), via a $300mil model porfolio, he is outperforming the leading global macro strategy investing peers, and within the context of this post, an expert who is batting 1000% and is 2:2 (as in home runs) when it comes to taking a bite out of and best leveraging the action in Apple Inc.

The fresh-off-the-press (April 21) AAPL options-centric trade idea is easily-accessed via the archives section of the Rareview Macro website (subscription required, Free Trials are available to newbies). For Twitterites, Rareview Macro updates can be followed via @RareviewMacro.