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S&P Launches First Commodity Index Comprised Solely of Futures Contracts Traded on International Exchanges
May 6, 2010--Providing greater access and insight into the performance of international commodity markets, Standard & Poor's, the world's leading index provider, announced today the launch of the S&P World Commodity Index ("S&P WCI"). The S&P WCI is the first index to consist solely of listed commodity futures contracts that trade outside of the U.S.
"The launch of the S&P WCI is the result of Standard & Poor's meeting the market's needs for an international commodity index that would complement the U.S. focused S&P GSCI, providing all-world commodity exposure," says Michael McGlone, Director of Commodity Indexing at S&P Indices. "The S&P WCI is a natural extension of the S&P GSCI, and reflects S&P Indices' commitment to extending its reach beyond U.S. equity indices and into alternative areas of the global market."
The S&P WCI is a rules-based, world-production-weighted commodity index. It includes 22 commodities covering the Agriculture, Energy and Metals sectors, listed on eight international exchanges and traded in six currencies in Asia, Europe, and North America. While the S&P GSCI is comprised of only U.S. dollar based commodities, the S&P WCI is multi-currency.
To preserve the tradability of the Index, the S&P WCI limits eligible commodity contracts to those that are the subject of active, liquid futures markets. Also, to replicate actual commodity market performance, the S&P WCI includes a "rolling" procedure designed to replicate the rolling of actual positions in the designated contracts.
The S&P WCI is calculated in U.S. dollars. While the underlying futures contracts prices are traded in local currencies, using WM/Reuters' spot exchange rates, these local currencies are converted to U.S. Dollars. There is no limit on the number of contracts that may be included in the S&P WCI, as long as they satisfy the eligibility criteria.
For complete eligibility criteria, as well as index calculation guidelines, please reference the S&P World Commodity Index's methodology found at www.indices.standardandpoors.com.
Source: Standard & Poors
Free Trading Vanguard's Shotguns
May 4, 2010--After waiving internal expenses on its money market funds, Vanguard announced today it's also waiving commissions for Vanguard Brokerage account holders who trade Vanguard exchange-traded funds. Commission-free trading has become the latest battleground in the ETF marketplace, and after Charles Schwab and Fidelity upped the ante with their own commission-free programs, Vanguard stepped in.
Of course, Vanguard didn't do this without some marketing help. You may recall the kafuffle a couple of months ago around the offer of "100 free trades" to certain high-net-worth Vanguard Brokerage clients. At the time I told you (see page 4 of the April 2010 newsletter) that, according to a source, Vanguard was testing the waters to determine whether this would increase both trading and adoption of its ETFs, or ETFs in general.
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Source: Forbes
J.P. Morgan to Sponsor Six WisdomTree ETFs on the Mexican Stock Exchange
May 4, 2010--J.P. Morgan announced today that it has been appointed by WisdomTree(R), an exchange-traded fund (ETF) sponsor and asset manager, to offer six of its U.S.-registered ETFs on the international segment of the Mexican Stock Exchange, Bolsa Mexicana de Valores (BMV).
The six new WisdomTree ETFs are listed on the BMV in pesos and trades can be initiated through a local broker: WisdomTree India Earnings Fund (EPI), WisdomTree Emerging Markets Equity Income Fund (DEM), WisdomTree Emerging Markets SmallCap Fund (DGS), WisdomTree LargeCap Dividend Fund (DLN), WisdomTree SmallCap Earnings Fund (EES), and WisdomTree Japan SmallCap Dividend Fund (DFJ).
J.P. Morgan's Depositary Receipts (DR) business services the ETFs and handles all corporate actions. J.P. Morgan also disseminates relevant shareholder and corporate actions information in the Mexican market via BMV. Additionally, a dedicated J.P. Morgan representative is available in Mexico City to provide local expertise and guidance to investors.
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Source: Wisdom Tree and JP Morgan
May 2010 Quarterly Refunding Statement
May 5, 2010--The U.S. Department of the Treasury is offering $78 billion of Treasury securities to refund approximately $30.9 billion of privately held securities maturing on May 15, 2010. This will raise approximately $47.1 billion.
The securities are:
A 3-year note in the amount of $38 billion, maturing May 15, 2013;
A 10-year note in the amount of $24 billion, maturing May 15, 2020; and
A 30-year bond in the amount of $16 billion, maturing May 15, 2040.
The 3-year note will be auctioned on a yield basis at 1:00 p.m. EDT on Tuesday, May 11, 2010. The 10-year note will be auctioned on a yield basis at 1:00 p.m. EDT on Wednesday, May 12, 2010, and the 30-year bond will be auctioned on a yield basis at 1:00 p.m. EDT on Thursday, May 13, 2010. All of these auctions will settle on Monday, May 17, 2010.
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U.S. Department of the Treasury.
NSX Releases April 2010 ETF Data Reports
May 4, 2010--Highlights from the April 2010 report include:
* Assets in U.S. listed Exchange-Traded Funds (ETF) and Exchange-Traded Notes (ETN) totaled a record of approximately $846.7 billion at April 2010 month-end, an increase of approximately 57% over April 2009 month-end when assets totaled $540.2 billion.
At the end of April 2010, the number of listed products totaled 998, compared to 844 listed products at the end of April 2009.
April 2010 net cash inflows from all ETFs/ETNs totaled approximately $12.8 billion.
Total Global/International Equity and Total U.S Equity led all categories with net cash inflows of $5.6 billion and $2.96 billion respectively for April 2010.
For more info visit nsx.com.
Source: NSX
Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association
May 4, 2010--Since the Committee met in early February, incoming data confirm that the economic expansion is moving onto a self-sustaining path. Although aggressive policy stimulus and a turn in the inventory cycle provided the initial spark for recovery, the sources of growth have broadened into private final demand. This shift appears to be generating gains in labor income and an improvement in financial conditions. Ongoing drags from tight credit markets and strained public finances are likely to temper the strength of the recovery for some time and slow the decline in the unemployment rate. However, the prospects for sustaining growth are good.
On the heels of a 5.6% annualized gain in the final quarter of 2009, GDP growth moderated to 3.2% last quarter.
Although a large inventory contribution faded some, growth continues to be supported from a turn in the stock-building cycle. Importantly, the recovery in final sales is finding firmer ground as equipment spending, exports and personal consumption each posted a third consecutive gain last quarter. The manufacturing sector continues to benefit from the lift in domestic and foreign demand, with output rising at a 6.6% pace last quarter. The most recent readings from business surveys – including a 60.4 ISM manufacturing survey in April – point to further rapid gains this quarter. Indicators such as the ISM non-manufacturing survey and the establishment survey of private service employment have moved higher, suggesting that growth in the service sector is now gaining momentum.
Retail sales expanded briskly in the first quarter, supporting growth in real consumption at a 3.6% annual rate. It appears that households are responding to resumption in labor income growth – compensation rose at a 3.6% annualized pace last quarter – alongside rising equity wealth, and a gradual opening up of credit availability. As a result, a sharp upward adjustment in the saving rate appears to have ended. However, last quarter's fall in the saving rate is not likely to be repeated and most forecasts anticipate rising saving this year that holds spending gains close to its recent pace, even as labor income growth is sustained.
Dow Jones adds Required Business Performance indices
"The strategy indexes licensed to Transparent Value represent a brand new approach to indexing that combines the innovative RBP methodology with aggressive, defensive and neutral views of the market," said Michael A. Petronella, president designate, Dow Jones Indexes. "Dow Jones RBP Indexes are quantitative strategy indexes built upon rules-based analytics providing a powerful tool set for measuring and evaluating component company valuation."
Emerging Markets Week in Review 4/26/2010 - 4/30/2010 read more Geithner Testimony before the Senate Finance Committee
The principle that the cost of putting out a financial fire should be recovered from financial institutions was adopted by Congress in the aftermath of the savings-and-loan crisis. The FDIC Improvement Act (FDICIA) required the FDIC to recoup any losses it incurred as a result of closing failed banks through assessments on banks. This same principle is incorporated into the financial reform proposals adopted by the House and now being considered by the Senate. Both bills require the financial industry to repay the government for any costs associated with the resolution of a failing financial institution. read more US pension funds sue Goldman over Abacus
They filed their amended complaint on April 28, according to a new Goldman 8-K filing.
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Source: U.S. Department of the Treasury
May 4, 2010--Dow Jones Indexes, a leading global index provider, today announced the addition of four new indexes to its family of Dow Jones RBP Indexes. The new series of indexes include three directional strategy indexes and one fundamentally weighted U.S. market index. The three strategy indexes are the Dow Jones RBP U.S. Large-Cap Aggressive Index, the Dow Jones RBP U.S. Large-Cap Defensive Index, and the Dow Jones RBP U.S. Large-Cap Market Index. The fundamentally weighted market index, the Dow Jones U.S. Large-Cap Total Stock Market Index (RBP weighted), provides market participants with additional rules-based information to measure the valuation of publicly traded companies included in the index.
The Dow Jones RBP U.S. Large-Cap Aggressive Index, the Dow Jones RBP U.S. Large-Cap Defensive Index, and the Dow Jones RBP U.S. Large-Cap Market Index are licensed to Transparent Value LLC, a Guggenheim Partners Company, to underlie three mutual funds.
Source: Dow Jones Indexes
May 3, 2010--The Dow Jones Emerging Markets Composite Index declined 0.71% last week as the European Monetary Union and the IMF secured a plan worth $146 billion to aid Greece. Health Care and Financials were the best performers for the week, gaining 1.13%% and 0.98% respectively.
Telecom and Energy led the decline, down 1.41% and 1.10% respectively. All sectors but Energy remain positive for the year.
Source: Emerging Global Advisors
May 4, 2010--Chairman Baucus, Ranking Member Grassley, Members of the Committee, thank you for the opportunity to testify before you today regarding the Financial Crisis Responsibility Fee.
On October 3, 2008, Congress gave the Treasury Department authority to stabilize the American economy through the enactment of the Emergency Economic Stabilization Act (EESA).
Congress included in the legislation a requirement that the President put forward a plan "that recoups from the financial industry an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program (TARP) does not add to the deficit or national debt."
Source: U.S. Department of the Treasury.
SEC charges prompt funds to take action.
May 4, 2010--Two US pension funds are sueing Goldman Sachs – with other funds threatening to follow – claiming negligence over billions of dollars of paper losses at the bank, after its share price tanked following the recently announced SEC investigation into the controversial Abacus deal.
Septa, the $640m Pennsylvania transportation fund, and the International Brotherhood of Electrical Workers Local 98 Pension Fund, said they had amended an existing lawsuit against Goldman regarding executive pay to include the new charges.
Source: Responsible Investor