China Etf Hedging Costs At Record Low On Stimulus Wagers – Bloomberg

rose 2 percent last week for the biggest advance since February. Chinese stocks are back in favor as growth in industrial output and retail sales accelerated in May while new bank loans exceeded analyst estimates. Policy makers have taken measures such as lowering reserve requirements for some banks, providing tax breaks and accelerating public spending to shore up an economy that expanded at the slowest pace in six quarters for the January-March period. The targeted easing over the past two months has kept a floor under growth and assuaged investors concerns about a hard landing, Michelle Gibley, director of international [read] research at San Francisco-based Charles Schwab Corp., which has about $2.35 trillion in client assets, said by e-mail on June 13. Chinese stocks are pricing in a lot of bad news and we believe the risk/reward is favorable for owning Chinese stocks over the next 6-12 months. Slowing Growth The Shanghai Composite Index (SHCOMP) rose 0.1 percent to 2,073.36 at 10:34 a.m.

Look Inside Your Sector ETF Before You Buy – Forbes

The June, 2014 edition of the World Banks Global Economic Prospects report had this to say about Chinas economy: Growth for China is expected to ease gradually to 7.6 percent in 2014 and to 7.4 percent by 2016, with less, but only gradually declining reliance on credit-induced investment-led growth. Given the fact that Chinas economic growth target for 2014 is 7.5 percent, one might easily assume that Premier Li Keqiangs response to the report could have been: Ill take it! On June 2, the May official manufacturing PMI from Chinas National Bureau of Statistics rose to 50.8 from Aprils 50.7. Although a reading above 50 indicates expansion, a number of economists have explained that Chinas manufacturing PMI needs to clear 51 to establish some escape velocity. On June 3, the HSBC China Manufacturing PMI report indicated that Chinas manufacturing PMI increased to 49.4 in May, from Aprils 48.1. Although a reading below 50 indicates contraction, the improvement from April reinforced the notion that the nations recent economic slowdown was just a temporary setback. On June 9, the General Administration of Customs reported that the nations exports increased 7 percent in May, on a year-over-year basis. Economists had been expecting a 6.6 percent increase. Investors enthusiasm was subdued by the fact that imports fell 1.6 percent, compared with economists expectations for a 6.1 percent increase. Although Chinas trade surplus reached its highest level in five years, the slump in imports signaled sluggishness in the domestic economy because of reduced demand. On June 13, Chinas National Bureau of Statistics reported that in May, retail sales increased 12.5 percent on a year-over-year basis and that industrial production increased 8.8 percent on a year-over-year basis.

Mixed News about China: Weekly International ETF Report

By 2012, it was in a solid uptrend and moved well above the 2011 highs, line d, in early 2013. The March 6 high of $60.50 is now being challenged with Junes projected pivot resistance ( courtesy of John Persons software ) at $61.67 with the weekly starc+ band at $61.88. There is initial monthly support at the May low of $57.03 with further at $55.39, which was the April low. As the table indicates, the top ten holdings of XLV make up over 54% of the ETF with Johnson & Johnson ( JNJ ) the top holding at 12.55%.

Noteworthy ETF Inflows: HYG –

XLE has been a clear winner year to date and especially recently, seemingly hitting new highs every day now on mounting tensions in Iraq. Top holdings are of course XOM and CVX, which make up a good 28% of the portfolio, and there are 43 other names in the index outside of these too. SLB, COP, and EOG round out the top five, and it appears that some may be bracing for a potential reversal in the sector if not simply longs hedging a good sized position on the books into the weekend and near term. XLE has had notable inflows YTD, taking in >$3 billion and is now a >$12 billion fund. This ETF is also the largest Energy Equity ETF in the space by a mile as well, trumping the second largest VDE (Vanguard Energy, Expense Ratio 0.14%) which only has about $3.2 billion in AUM. XOM and CVX by nature are Value stocks, with 2.70% and 3.50% yields respectively, and managers that may have been fortunate to either buy the stocks outright or via an Energy ETF with sizable weightings towards them like an XLE for example, three, six, or twelve months ago, have seen not only steady dividends roll in but also impressive breakout price performance which has recently trumped the broad market indices.

ETF Chart of the Day: An Energetic Friend | ETF Trends

The chart below shows the one year price performance of HYG, versus its 200 day moving average: Looking at the chart above, HYG’s low point in its 52 week range is $88.27 per share, with $95.07 as the 52 week high point – that compares with a last trade of $94.90. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique — learn more about the 200 day moving average . Exchange traded funds (ETFs) trade just like stocks, but instead of ”shares” investors are actually buying and selling ”units”. These ”units” can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed).


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