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Horizons AlphaPro Launches S&P/TSX 60 Equal Weight Index ETF
July 14, 2010--AlphaPro Management Inc. ("AlphaPro"), the manager of the Horizons AlphaPro family of exchange traded funds ("ETFs"), is pleased to announce the listing of the first and only ETF in Canada to track the recently created S&P/TSX 60(TM) Equal Weight Index (the "Equal Weight Index"). The Horizons AlphaPro S&P/TSX 60 Equal Weight Index ETF (the "Equal Weight ETF") will begin trading today on the Toronto Stock Exchange (the "TSX") under the symbol HEW.
The Equal Weight ETF will seek to replicate the performance of the Equal Weight Index, net of expenses.
The Equal Weight Index and the S&P/TSX 60(TM) Index are comprised of 60 of the largest (by market capitalization) and most liquid securities listed on the TSX, selected by Standard & Poor's using its industrial classifications and guidelines for evaluating issuer capitalization, liquidity and fundamentals.
As its name implies, the Equal Weight Index assigns an equal weight to each of the constituent 60 Canadian stocks in the S&P/TSX 60(TM) Index and is rebalanced on a quarterly basis.
ETFs that use the S&P/TSX 60(TM) Index as a benchmark represent a large proportion of Canadian ETF assets. The S&P/TSX 60(TM) Index uses a market-capitalization weighting ("Cap-Weighted") methodology. A Cap-Weighted methodology assigns a weight to each constituent issuer based on its market capitalization and is not rebalanced.
As of June 21, 2010, the last rebalance date of the Equal Weight Index, the 10 largest constituents represented more than 45.4% of the weight of the S&P/TSX 60(TM) Index, whereas these same 10 stocks represented less than 17% of the weight of the Equal Weight Index. In addition, 32.9 % of the S&P/TSX 60(TM) Index was concentrated in the financial sector, while only 16.7% of the Equal Weight Index was in that sector.
UBS AG Exchange Traded Access Security (E-TRACS) Linked to the Alerian Natural Gas Index to begin trading on NYSE Arca
July 14, 2010-- NYSE Euronext (NYX) announced that its wholly-owned subsidiary, NYSE Arca, today began trading the UBS AG Exchange Traded Access Security (E-TRACS) Linked to the performance of the Alerian Natural Gas Index due July 9, 2040. Issued by UBS AG, this exchange traded note is a senior unsecured medium-term note, which may issue a quarterly coupon during their term less the accrued fees.
The Alerian Natural Gas Index is composed of the 15 largest natural gas infrastructure-focused master limited partnerships, whose constituents generally earn the majority of their EBITDA from the transportation, storage, and processing of natural gas. It provides investors with a transparent value for midstream companies with long-term contracts and hard assets exposed to potential growth from the expansion of existing pipeline and storage capacity, as well as supply shifts associated with other large-scale U.S. shale projects.
For more information on the fund, please visit http://www.ibb.ubs.com/mc/etracs_US/
TABB Says Buy Side Use of Algorithms Will Rise to 35% in 2011, on Par with High-Touch Sales Traders for the First Time
New Research Details Low-Touch Trading Trends in the US Equity Markets Based on Interviews with 123 US-based Asset Managers and Hedge Funds
July 14, 2010 – With asset managers and hedge funds in the US accounting for nearly one third of the share volume traded in 2010, up sharply from a low of 25% in December 2008, the overall effect on the institutional equity brokerage industry is a wash: trading volume is down but not as much as the rest of the industry. Meanwhile, TABB Group, in a new research report published today, says that the use of low-touch algorithms will reach 35% in 2011, for the first time on par with high-touch sales traders.
The new report, “US Equity Trading 2010: Low-Touch Trends,” provides a capital markets industry update on low-touch trading trends in the US equity markets. Its co-authors, Cheyenne Morgan, research analyst, and Adam Sussman, director of research, analyzed data based on interviews with 123 head traders of US-based institutional equity management firms and head traders with aggregate assets under management (AuM) of $12.1 trillion and $182.1 billion, respectively.
A considerable portion of these discussions covered head traders’ opinions regarding the continued growth of low-touch trading, including trends in order allocation across high- and low-touch trading venues and selection criteria in algorithmic trading. The report also focuses on dark pools and crossing networks
According to Morgan, algorithms continue to be the stand-out winner amongst trading strategies, continuing to grow in importance and volume as traders turn to low-touch execution methodologies. “Competition for market share amongst the top algorithm providers is intense and while there is more competition then ever amongst the top five providers, the total number of participants TABB identifies is 13, all with strong positions, indicating there is a clear list of contenders in this space providing buy-side firms with more choices than ever” This, she adds, is occurring at a time that, although sales trading remains the dominant source of commission revenues, TABB believes algos will continue to gain ground.”
Minutes of the Federal Open Market Committee, May 9 and June 22-23, 2010
July 14, 2010--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on June 22-23, 2010 and of the conference call held on May 9, 2010. A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the June 22-23, 2010 meeting is also included as an addendum to these minutes.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. Summaries of economic projections are released on an approximately quarterly schedule. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.
The FOMC minutes can be viewed on the Board's website at http://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.
view the Minutes of the Federal Open Market Committee-May 9 and June 22-23, 2010
view 2010 Monetary Policy Releases
SEC Votes to Seek Public Comment on U.S. Proxy System
July 14, 2010--The Securities and Exchange Commission today voted unanimously to issue a concept release seeking public comment on the U.S. proxy system and asking whether rule revisions should be considered to promote greater efficiency and transparency.
The U.S. proxy system governs the way in which investors vote their shares in a public company regardless of whether they attend shareholder meetings.
“The proxy is often the principal means for shareholders and public companies to communicate with one another, and for shareholders to weigh in on issues of importance to the corporation,” said SEC Chairman Mary L. Schapiro. “To result in effective governance, the transmission of this communication between investors and public companies must be timely, accurate, unbiased, and fair.”
It has been nearly 30 years since the Commission last conducted a comprehensive review of the proxy voting infrastructure. With significant changes since then in shareholder demographics, technology, and other areas, the Commission’s review of the U.S. proxy system will examine emerging issues that either did not exist or were not considered significant three decades ago.
The SEC’s concept release focuses on the accuracy and transparency of the voting process, the manner in which shareholders and corporations communicate, and the relationship between voting power and economic interest.
Pimco makes U-turn on UK bonds
July 14, 2010--Pimco, the world’s second-biggest bond fund manager, has reversed its decision to cut exposure to the UK bond markets after this year’s impressive performance of gilts.
Pimco, which took a negative view on the UK last year because of the widening budget deficit and poor public finances, has switched its stance from underweight to neutral on gilts, according to people familiar with the situation.
New! Weeklys on DJX starting Thursday
July 14, 2010--Beginning Thursday, July 15, CBOE will add Weeklys options on The Dow Jones Industrial AverageSM (option ticker symbol: DJX). New DJX Weeklys series generally will be listed on Thursday mornings and the last trading day will be the following Thursday; they are “Friday a.m.” settled and expire on Fridays.
Weeklys are options that have a life of just one week. Typically new series are listed on Thursdays and expire on Friday the following week. However, new Weeklys series are not listed that would expire during the expiration week for standard options (the third Friday of the month). Except for the time to expiration, Weeklys have the same contract specifications as standard options.
CBOE now offers Weeklys options on*:
Indexes: SPX, DJX, OEX and XEO. (Note that new XSP Weeklys series will not be listed)
ETFs: SPY, QQQQ, IWM, GLD, GDZ, XLF, EEM.
Equities: Citigroup, Inc. (C), Bank of America Corporation (BAC), Apple Inc. (AAPL), British Petroleum (BP) Ford Motor Company (F) and Google Inc. (GOOG).
*Weeklys classes can change week to week
Direxion Shares Launches Four New Leveraged ETFs
New Funds Offer Long and Short Exposure to the Retail and Natural Gas Related Sectors
July 14, 2010---- Direxion, a pioneer in providing alternative investment strategies to sophisticated investors, is pleased to announce the launch of four new Direxion Shares Daily 2x ETFs to its existing lineup of multi-directional, leveraged funds. This brings the total number of leveraged ETFs offered by Direxion to thirty-eight.
The new ETFs are leveraged Bull and Bear funds that seek 200% of the daily performance, or 200% of the inverse of the daily performance (before fees and expenses), of the ISE-REVERE Natural Gas Index and the Russell 1000 RGS Retail Index.
These new funds, and all Direxion Shares ETFs, are intended for use only by sophisticated investors who understand the risks associated with seeking daily leveraged investment results and plan to actively monitor and manage their positions in the funds. There is no guarantee that the funds will achieve their objective.
"Direxion works to continuously deliver innovative tactical investment solutions that help sophisticated investors take advantage of market opportunities regardless of conditions," stated Dan O'Neill, Direxion Shares' President.
Many sophisticated advisors and institutional investors are using Direxion 2x and 3x ETFs to hedge positions in their current portfolios, while others are using the Funds to seek to take advantage of short-term trading opportunities available in today's markets.
The ISE-REVERE Natural Gas Index tracks companies that derive a substantial portion of their revenues from the exploration and production of natural gas. The Russell 1000 RGS Retail Index includes constituents of the Russell 1000 Index that are classified within the Retail subsector of the Russell Global Sector Scheme.
NYSE Arca to Introduce New Collar to Safeguard Market Orders
July 14, 2010-- NYSE Arca, a unit of NYSE Euronext (NYX), has filed with the Securities and Exchange Commission to introduce a new price collar designed to safeguard the execution of market orders. The new price collar will be introduced on July 15, 2010 and is the latest in a series of steps implemented to improve market practices and structure since the "flash crash" of May 6, 2010.
"The market-order collar is an additional protection that complements those already in place and addresses a specific issue highlighted by the flash crash -- market orders that were executed at anomalous prices in electronic markets. The new collar is designed to help limit potential harm from extreme market volatility by preventing trades from occurring a specified percentage away from the last trade price," said Joseph Mecane, Executive Vice President and Co-Head of U.S. Listings and Cash Execution. "We will continue working closely with the SEC, other markets and market participants toward the goals of further strengthening the markets' safety net and rebuilding investor confidence in our national market system."
The new collar will prevent market orders to buy stock from executing or routing to another trading venue at a price above the collar. Conversely, market orders to sell will not execute or route at a price below the trading collar. The collar for issues priced $25 or less will be 10 percent above or below the last trade price; for issues priced above $25 up to and including $50, the collar will be 5 percent; and for issues above $50, the collar will be 3 percent. These limits also will help prevent erroneous trades from inadvertently triggering the individual-stock circuit breakers introduced last month, and are consistent with those in the newly implemented rules concerning the cancellation of erroneous trades.
Additional details of the new measure, including trading examples, are in the NYSE Arca rule filed with the SEC, linked here: http://apps.nyse.com/commdata/pub19b4.nsf/docs/F9706A0475E6BEAF85257760005AC153/$FILE/NYSEArca-2010-67.pdf
In just over two months since May 6, the following corrective measures have been implemented by the markets in concert with the SEC:
A pilot program of circuit breakers for individual issues was first rolled out on June 11 for stocks in the Standard & Poor's 500.
An expansion of the above pilot program to cover 344 exchange traded products plus all stocks in the Russell 1000 index is planned for later this month, pending SEC approval.
All markets have proposed amendments to existing rules concerning clearly erroneous trades, to make the cancellation of such trades -- when they occur in connection with an individual stock circuit breaker -- transparent and predictable for market participants.
NYSE Arca has revised its market order routing to further enhance its interaction with the New York Stock Exchange when a Liquidity Replenishment Point has been reached and other individual-stock safeguards imposed by primary markets.
Opening Statement Before the Technology Advisory Committee-Chairman Gary Gensler
July 14, 2010--Good afternoon. Thank you Commissioner O’Malia for chairing today’s meeting of the Technology Advisory Committee. This is the Technology Advisory Committee’s first meeting since its charter was renewed this year. The futures marketplace has evolved substantially over the course of the last decade. We’ve gone from open outcry trading to predominantly electronic trading platforms. In fact, in today’s futures marketplace, roughly 90 percent of the market is traded electronically.
Though we are fortunate to receive daily trade data and position data electronically, there is much we can learn and great deal more we can do regarding technology. For instance, while in some cases we still receive paper forms from market participants, we are considering putting out rules to automate our Form 40 and Form 102. This will allow us to automate the receipt of important information from the marketplace.
Internally, we are moving toward automation of our surveillance. While market participants have the technology to automate their trading, we must improve our ability to employ modern technology to automate our surveillance.
FINRA to Make Additional Information About Brokers, Former Brokers Publicly Available Through BrokerCheck
Full Records of Brokers Leaving Industry to Remain Available for 10 Years; Criminal Convictions, Civil Injunctions, More to Remain Available Permanently
July 13, 2010--The amount of information available to the public about current and former securities brokers will expand significantly in coming months, as the Financial Industry Regulatory Authority (FINRA) implements changes to its free, online BrokerCheck service recently approved by the Securities and Exchange Commission.
The changes will increase the number of customer complaints reported publicly; extend the public disclosure period for the full record of a broker who leaves the industry from two years to 10 years; and, make certain information about former brokers available permanently, such as criminal convictions and certain civil injunctive actions and arbitration awards against the broker.
The changes will also formalize a dispute process for current or former brokers to dispute the accuracy of, or update, factual information disclosed through BrokerCheck.
"This additional information will benefit investors who are considering whether to conduct, or continue to conduct, business with a particular securities firm or broker," said FINRA Chairman and CEO Rick Ketchum. "Just as important, it will provide valuable information about persons who have left the securities industry, often not of their own accord, who have established themselves in other segments of the financial services industry and can still cause great harm to the investing public."
When the expansion is implemented, BrokerCheck will:
* Disclose all "historic" complaints against a broker dating back to 1999, when electronic filing of broker information began. Generally, historic complaints are customer complaints, arbitrations or litigations more than two years old that have not been adjudicated or have been settled for an amount less than the reporting requirement (currently $15,000). They are currently reported on BrokerCheck when the broker has three or more currently disclosable regulatory actions, customer complaints, arbitrations, litigations or historic complaints. The expanded BrokerCheck will disclose all historic complaints dating back to 1999 for individual brokers who are currently registered or whose registrations were terminated within the preceding 10 years.
Commentary: Pessimism is the new black - the latest fashion
July 13, 2010--It is hard to recall a time when investor pessimism has been more in vogue than it is today. Yes, there is plenty of bad news to go around - imploding European economies, slipping US job growth, record deficits, and fears of a dreaded double dip.
What's worse, even good news is being interpreted as bad. Record corporate cash of $10 trillion is seen as corporate timidity, rather than prudent deleveraging. Many efforts to sustain economic expansion are seen as too late, too slow, too tepid, too fleeting. You'd think it was 1937 again. Is all this gloom really justified, and what's it mean for investors?
Direxion files with the SEC
July 13, 2010--Direxion has filed a post-effective amendment, registration statement with the SEC for
Direxion Airline Shares, Direxion Auto Shares, Direxion Daily Canada Bull 2X Shares, Direxion Daily Canada Bear 2X Shares, Direxion Daily Russia Bull 2X Shares, Direxion Daily Russia Bear 2X Shares, Direxion Daily Agribusiness Bull 2X Shares, Direxion Daily Agribusiness Bear 2X Shares, Direxion Daily Gold Miners Bull 2X Shares, Direxion Daily Gold Miners Bear 2X Shares, Direxion Daily Home Construction Bull 2X Shares,
Direxion Daily Home Construction Bear 2X Shares, Direxion Daily Natural Gas Related Bull 2X Shares, Direxion Daily Natural Gas Related Bear 2X Shares, Direxion Daily Brazil Bull 3X Shares, Direxion Daily Brazil Bear 3X Shares, Direxion Daily Indonesia Bull 3X Shares, Direxion Daily Indonesia Bear 3X Shares, Direxion Daily Malaysia Bull 3X Shares, Direxion Daily Malaysia Bear 3X Shares, Direxion Daily South Korea Bull 3X Shares, Direxion Daily South Korea Bear 3X Shares, Direxion Daily Taiwan Bull 3X Shares, Direxion Daily Taiwan Bear 3X Shares, Direxion Daily Thailand Bull 3X Shares, Direxion Daily Thailand Bear 3X Shares, Direxion Daily Commodity Related Bull 3X Shares, Direxion Daily Commodity Related Bear 3X Shares, Direxion Daily Global Infrastructure Bull 3X Shares, Direxion Daily Global Infrastructure Bear 3X Shares, Direxion Daily Regional Banks Bull 3X Shares, Direxion Daily Regional Banks Bear 3X Shares, Direxion Daily Water Bull 3X Shares, Direxion Daily Water Bear 3X Shares, Direxion Daily Wind Energy Bull 3X Shares and Direxion Daily Wind Energy Bear 3X Shares
Standard & Poor's Announces Changes In The S&P/TSX Venture Composite Index
July 13, 2010-Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Tuesday, July 13, 2010:
Verena Minerals Corp. (TSXVN:VML) will change its name to Belo Sun Mining Corp.
The new ticker symbol will be "BSX" and the new CUSIP number will be 080588 10 9. There is no consolidation of capital.
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
BofA Merrill Lynch Fund Manager Survey Finds Bear Market Sentiment Is Back
Investors Move out of U.S. and into Emerging Markets
July 13, 2010--Investors have turned bearish in their outlook for the global economy and corporate earnings, according to the BofA Merrill Lynch Survey of Fund Managers for July.
The survey shows a net 12 percent of respondents predicting the global economy will deteriorate in the coming 12 months, the first negative forecast since February 2009. This represents a big turnaround from June when a net 24 percent forecast the economy to strengthen.
A net 4 percent of the panel expects corporate profits to worsen in the coming year, also the first negative outlook in more than a year. It compares with a net 28 percent forecasting earnings growth just last month. A net 1 percent says that profit margins will fall in the coming year, compared with a net 31 percent predicting improved margins in May.
Risk appetite has dipped with investors moving into cash and reducing exposure to cyclical stocks. Cash now comprises 4.4 percent of an average portfolio, up from 4.1 percent in May. A net 39 percent of the panel is taking lower than normal risk, more than double the proportion in May. Allocations towards Pharmaceuticals, a classic bear market sector, increased to the highest level since March 2009.
"July's survey echoes the sentiment that investors expressed during the recession in early 2009," said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research. "Growth and profit expectations have double-dipped. Should upcoming data fail to confirm a double-dip, risk assets will have a much better third quarter," said Michael Hartnett, chief Global Equity strategist at BofA Merrill Lynch Global Research.
Out of the U.S., into Emerging Markets and eurozone
Investors are more concerned about the outlook for U.S. equities than at any point since November 2006, with a net 14 percent of the panel saying it is the region they would most like to underweight. In June a net 14 percent said the U.S. was the region they most wanted to overweight. Global asset allocators have already reduced exposure to the region, with net 7 percent of panel overweight U.S. equities, down from a net 20 percent in June.
Global Emerging Markets (GEM) has been gaining in popularity while investors are also returning to the eurozone -- in spite of weakened economic sentiment towards China and Europe respectively.
A net 34 percent of global asset allocators are overweight GEM equities, up from 19 percent in May. A net 48 percent of investors identify GEM as the region they would most like to overweight over the next 12 months, more than double the reading in May. Over the same period, the proportion of respondents predicting a weaker Chinese economy has surged to a net 39 percent up from a net 3 percent. The proportion of asset allocators underweight eurozone equities has fallen to a net 10 percent, down from a net 27 percent in June. At the same time, a net 17 percent of European investors expect the region's economy to weaken.
Buying expensive bonds; selling cheap equities
Respondents have scaled back positions in global equities while moving into bonds in the past two months. The proportion of asset allocators overweight equities has slipped to a net 11 percent from 30 percent in May. The proportion underweight bonds has fallen to a net 15 percent, down from 29 percent in May. This is despite investors acknowledging that equities are increasingly undervalued and bonds increasingly overvalued. The spread in perceived valuations of bonds and equities is at its widest since 2003.
Risk aversion is not restricted to long-only investors. Hedge funds have reduced their net equity exposure to its lowest since March 2009.
Four out of 10 investors predict no Fed rate hike for a year
Inflation concerns have eased as sharply as growth concerns have appeared. A net 12 percent of investors predict inflation to fall in the coming year, a turnaround from June when a net 12 percent were forecasting higher inflation. As a result investors are pushing back the date they expect next to see a rate hike in the U.S. or eurozone. Four out of 10 respondents to the Global Survey are ruling out any rate hike by the Fed before July 2011, and only 4 percent predict an increase this year. The Regional Survey shows 47 percent of European investors predict no rate hike from the ECB before July 2011.
Survey of Fund Managers
A total of 202 fund managers, managing a total of US$530 billion, participated in the global survey from 1 July to 8 July. A total of 170 managers, managing US$393 billion, participated in the regional surveys. The survey was conducted by BofA Merrill Lynch Global Research with the help of market research company TNS. Through its international network in more than 50 countries, TNS provides market information services in over 80 countries to national and multi-national organizations. It is ranked as the fourth-largest market information group in the world.
