US Small-Cap Stocks

Total Page:16

File Type:pdf, Size:1020Kb

US Small-Cap Stocks U.S. Small-Cap Stocks: Why This Cycle Is Not So Different Presenters: Hugh Evans, Steph Jackson, Jack Laporte, Greg McCrickard, and David Wagner Case for Small-Cap Equities As of September, 30 2009 Annualized Asset Class Returns since 19261 15% 12.8% 12.5% 12% 10.5% 9% 6% 5.5% 4.6% 3.6% 3% 0% U.S. Small-Cap Equities U.S. Mid-Cap Equities U.S. Large-Cap Equities Bonds Precious Metals Cash Relative Performance of Small-Caps vs. Large-Caps 190 Recessions 165 Small-Caps Outperform 140 Small-Cap/Large-Cap Relative 115 Small-Caps Strength Underperform 12-Month Moving Average 90 '50 '54 '58 '62 '66 '70 '74 '78 '82 '86 '90 '94 '98 '02 '06 Small-caps have outperformed other asset classes over extended time periods, while exhibiting periods of extended outperformance and underperformance versus large-caps. (1) Precious metals returns only since 1947 All Returns are annualized returns from 1926 to June 30, 2009 except precious metals which is from 1947- September 30,2009. Equity returns are based on Center for Research in Security Prices, University of Chicago Data, Large-cap: Deciles 1, Mid-cap: Deciles 2 and 3, Small-cap: Deciles 4 and 5. Precious metals returns are based on CRB CCI Precious Metals Index. Bonds based on US IT Government Index from 1926-1972, Lehman Bros. Government Corporate Index from 1973-1975, Barclays Cap. U.S. Aggregate Index from 1976-Present. Cash based on the 30-day T-bill yield. Past performance does not guarantee future results. Charts in this presentation are for illustrative purposes only and not intended to represent any specific security. Source: CRSP Center for Research in Securities Prices-University of Chicago, T. Rowe Price, The Leuthold Group September 2009 2 Case for Small-Cap Equities As of September, 30 2009 Percent of Periods Outperforming Large-Caps Over Various Time Horizons 100% 90% 90% Small-Caps 83% 84% 80% Mid-Caps 75% 76% 70% 66% 58% 61% 60% 54% 55%53% 55% 50% 40% 30% 20% 10% 0% 1 Year 3 Years 5 Years 10 Years 15 Years 20 Years The smaller-capitalization equity asset classes outperform large- caps on a relative basis with a higher success rate when investors hold the asset class for a longer time period. Source: Merrill Lynch Small-Cap Research 3 Case for Small-Cap Equities As of September, 30 2009 World Indices–Market Capitalization Total Market Value (U.S. $ Trillions) MSCI EM Index 2.9 DAX Index 0.7 CAC 40 Index 1.0 FTSE 100 Index 2.1 Nikkei 225 Index 2.2 Russell 2500 Index 2.0 Russell 3000 Index 11.4 S&P 500 Index 9.3 MSCI World Index 20.8 $0 $5 $10 $15 $20 $25 Trillions Along with other international indices, U.S. small- and mid-caps make up a large part of the world’s investable universe. Source: Factset, T. Rowe Price, Bloomberg 4 Case for Small-Cap Equities As of September, 30 2009 Number of Companies in Various Market Cap Buckets Total Market Value ($ Billions) of all Companies in Market Cap Bucket $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 Smallest 0-1,000 Number of Companies Mid 1,000-10,000 Total Market Value ($ Billions) ($ Millions) ($ Largest Over10,000 Market Cap Bucket Bucket Cap Market 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Number of Companies Average Number of Analysts Covering a Stock by Size f 25 20 18 15 12 10 8 Analysts 4 5 Average Number o 0 Large Mid Small Micro Merrill Lynch Size Composites The sheer number of companies in the small-cap opportunity set is large, leading to less analyst coverage and potential for outsized rewards through value-added research. Source: FactSet, Merrill Lynch Small-Cap Research, T. Rowe Price 5 Case for Small-Cap Equities As of September, 30 2009 Risk/Return Relationship 1974–2009 50% Small/ 15% 50% Large 100% Small-Caps 100% Large-Caps Annualized Total ReturnAnnualized 10% 15% 20% Annualized Standard Deviation Adding Uncorrelated Assets Increases Correlation Between Small- and Benefit to Diversification Large-Cap Stocks Mor e 1.0 0.9 Return 0.8 Correlation of 20 Year Monthly Returns Correlation of 10 Year Monthly Returns Benefits of DiversificationBenefits of Less 0.7 -1Correlation 1 '36 '43 '50 '57 '64 '71 '78 '85 '92 '99 '06 Small-caps provide portfolio diversification benefits over a portfolio consisting of only large-cap stocks, and can increase portfolio return potential with only moderate increase in risk. Source: Merrill Lynch Small-Cap Research 6 Case for Small-Cap Equities As of September, 30 2009 Relative Forecast P/E 1.5 1.1 1.0 Long-Term Average = 1.04 0.5 1Q80 1Q84 1Q88 1Q92 1Q96 1Q00 1Q04 1Q08 Relative Price/Book Relative Price/Sales 1.2 1.2 0.75 Long-Term Average = 0.77 0.9 0.9 0.6 0.6 Long-Term Average = 0.76 0.74 0.3 0.3 1Q80 1Q84 1Q88 1Q92 1Q96 1Q00 1Q04 1Q08 1Q80 1Q84 1Q88 1Q92 1Q96 1Q00 1Q04 1Q08 Small-cap valuations on price-to-earnings, price-to-book, and price-to-sales measures relative to large-caps are near long-term averages. All statistics are relative measures of the Russell 2000 Index versus the Russell Top 200 Index. Source: Merrill Lynch Small-Cap Research 7 Case for Small-Cap Equities As of September, 30 2009 M&A Activity and Russell 2000 Index Performance 1,600 900 1,400 Correlation = 0.72 800 1,200 700 1,000 600 500 800 400 600 300 400 Number of U.S. M&A Deals 200 M&A Number of Deals of M&A Number 200 Russell 2000 Index 100 Russell Index 2000 Level 0 0 Jan-90 Jul-91 Jan-93 Jul-94 Jan-96 Jul-97 Jan-99 Jul-00 Jan-02 Jul-03 Jan-05 Jul-06 Jan-08 Jul-09 M&A Activity and Russell Midcap Index Performance 1,600 3,000 1,400 2,700 Correlation = 0.69 2,400 1,200 2,100 1,000 1,800 800 1,500 600 1,200 900 400 Number of U.S. M&A Deals 600 Russell Mid-Cap Index M&A Number ofDeals 200 Russell Mid-Cap Index (EOP, Dec/31/78=100) 300 0 0 Jan-90 Apr-91 Jul-92 Oct-93 Jan-95 Apr-96 Jul-97 Oct-98 Jan-00 Apr-01 Jul-02 Oct-03 Jan-05 Apr-06 Jul-07 Oct-08 M&A has been a key driver of small- and mid-cap index performance over time. Recent announcements are encouraging for small-/mid- cap stocks. Source: Citi Investment Research & Analysis 8 Case for Small-Cap Equities As of September, 30 2009 Recession Lessons 200% 150% Peak to Trough Drop One-Year Performance Post Small-Cap Trough 94% 100% 83% 75% 78% 65% 53% 56% 59% 44% 50% 35% 35% 33% 39% 38% 5% 0% -9% -14% -19% -11% -27% -29% -50% -36% -39% -34% -37% -37% -37% -50% -52% -60% -100% -150% 1 Crash Recession Recession Recession Recession Recession Recession Recession 1948-1949 1951-1954 1957-1958 1960-1961 1969-1970 1971-1975 1981-1982 Crisis Recession TMT Bubble, 2002 Sell Off 2002 Sell 2000-2001 Stock Market Stock 2007-2009 October 1987 1990 Recession 1945 Recession 1980 Recession Financial CrisisFinancial 1997/98 Financial Historically, when there has been a positive inflection point in economic indicators, small-cap equities have performed very strongly. (1) Sell off through 9 Mar 09, recovery 9 Mar 09 to 30 Sep 09 1945-1980: Ibbotson Small-Cap peak-to-trough drops and one-year recoveries (based on month-end closing prices). 1980-2009: Russell 2000 early recession/crisis sell-offs and 12-month recoveries off the bottom (based on daily peaks and troughs). Source: Citi Investment Research, Small-/Mid-Cap Strategy 9 Case for Small-Cap Equities As of September, 30 2009 Recession Lessons Date of Bear Market Low Small Growth Small Value Large Growth Large Value June 1932 341% 368% 130% 318% March 1938 40 22 42 32 April 1942 63 136 52 91 June 1949 46 33 33 41 October 1957 57 51 29 49 June 1962 20 36 32 43 October 1966 106 77 44 46 May 1970 78 62 58 44 October 1974 62 43 48 43 In 80% of March 1978 28 30 19 15 cases since August 1982 99 94 67 61 1932, small- December 1987 25 36 24 32 caps have October 1990 58 40 43 32 led the August 1998 42 18 46 18 market off of October 2002 78 65 34 40 extreme lows Average 76% 74% 47% 60% Median 58 43 43 43 Number of Times with 2 1 Highest Return 8 4 Early Bull Market Gains— Russell 2000 Growth Russell 2000 Value Russell 1000 Growth Russell 1000 Value March 9 - September 30 +74% +82% +54% +66% Off bear market lows, small-caps have typically outperformed over the following 12 months. All returns are based on Fama-French Benchmark Portfolios, Tuck School of Business. Returns based on monthly figures from 1932 to 1962; daily figures are used thereafter. Boxes highlight highest return among the four styles of each bear market low. Source: The Leuthold Group 10 Case for Small-Cap Equities • Small-caps have outperformed other asset classes over time. • The U.S. small-cap market is an important asset class. • The U.S. small-cap space allows potential for alpha generation due to the relative inefficiency of the market segment.
Recommended publications
  • Monthly Economic Update
    In this month’s recap: Stocks moved higher as investors looked past accelerating inflation and the Fed’s pivot on monetary policy. Monthly Economic Update Presented by Ray Lazcano, July 2021 U.S. Markets Stocks moved higher last month as investors looked past accelerating inflation and the Fed’s pivot on monetary policy. The Dow Jones Industrial Average slipped 0.07 percent, but the Standard & Poor’s 500 Index rose 2.22 percent. The Nasdaq Composite led, gaining 5.49 percent.1 Inflation Report The May Consumer Price Index came in above expectations. Prices increased by 5 percent for the year-over-year period—the fastest rate in nearly 13 years. Despite the surprise, markets rallied on the news, sending the S&P 500 to a new record close and the technology-heavy Nasdaq Composite higher.2 Fed Pivot The Fed indicated that two interest rate hikes in 2023 were likely, despite signals as recently as March 2021 that rates would remain unchanged until 2024. The Fed also raised its inflation expectations to 3.4 percent, up from its March projection of 2.4 percent. This news unsettled 3 the markets, but the shock was short-lived. News-Driven Rally In the final full week of trading, stocks rallied on the news of an agreement regarding the $1 trillion infrastructure bill and reports that banks had passed the latest Federal Reserve stress tests. Sector Scorecard 07072021-WR-3766 Industry sector performance was mixed. Gains were realized in Communication Services (+2.96 percent), Consumer Discretionary (+3.22 percent), Energy (+1.92 percent), Health Care (+1.97 percent), Real Estate (+3.28 percent), and Technology (+6.81 percent).
    [Show full text]
  • Russell 2000® Index Measures the Performance of the Small-Cap US Equity Market Segment of the US Equity Universe
    Index factsheet Russell 2000 Index About the index True representation of the The Russell 2000® Index measures the performance of the small-cap US equity market segment of the US equity universe. The Russell 2000® Index is a subset Objective construction methodology of the Russell 3000® Index representing approximately 10% of the total Provides an unbiased, complete view of the US equity market capitalization of that index. It includes approximately 2,000 of the market and underlying market segments smallest securities based on a combination of their market cap and current Modular market segmentation index membership. The Russell 2000® is constructed to provide a Distinct building blocks to provide insight into the comprehensive and unbiased small-cap barometer and is completely current state of the market and inform asset allocation reconstituted annually to ensure larger stocks do not distort the decisions performance and characteristics of the true small-cap opportunity set. Reliable maintenance and governance Disciplined, reliable maintenance process backed by a well-defined, balanced governance system ensures the Index characteristics indexes continue to accurately reflect the market (As of 7/31/2021) Russell 2000® Russell 3000® Tickers Price/Book 2.71 4.46 Russell 2000® Dividend Yield 0.99 1.26 Bloomberg PR RTY P/E Ex-Neg Earnings 19.25 24.71 Bloomberg TR RU20INTR EPS Growth - 5 Years 9.76 17.01 Reuters PR .RUT Number of Holdings 1,975 2,997 Reuters TR .RUTTU Market capitalization (in billions USD) (As of 7/31/2021) For more information, including a list of ETFs based on FTSE Russell Indexes, please call us or visit Russell 2000® Russell 3000® www.ftserussell.com Average Market Cap ($-WTD) $3.274 $478.338 The inception date of the Russell 2000® Index is Median Market Cap $1.193 $2.636 January 1, 1984.
    [Show full text]
  • Small Cap Is Active Management's Rightful Home
    SMALL CAP IS ACTIVE MANAGEMENT’S RIGHTFUL HOME Recent trends show a growing willingness among investors to apply indexing’s logic farther down the market-cap ladder. But, when it comes to smaller companies, the indexing argument isn’t very convincing. Maintaining exposure to the small-cap “category” through an index-based product eliminates the chance to benefit in an area that, we contend, offers active managers with fundamentals-based strategies the most consistent and pronounced opportunity to generate excess return. PASSIVE INFLUX: FUNDS FORM THE FOUNDATION WHILE ETFS KEEP PILING ON… The Vanguard Group introduced the first index fund at the end of 1975 as a low-cost way for investors to gain exposure to the companies of the S&P 500 Index, which account for roughly 80 percent of the stock market’s total capitalization. The strategy initially attracted $11 million in assets under management. According to S&P Dow Jones Indices, more than $7.8 trillion is currently benchmarked to the S&P 500 Index, “with index assets comprising approximately $2.2 trillion of this total.” Other estimates put indexing’s reach at more than one out of every three shares outstanding among the index’s component companies. The emergence of exchange-traded funds (ETFs), the first of which was launched in 1993 to track the S&P 500 Index, only adds momentum to passive investing’s growing presence within the equity market. Since 2008, when the SEC broadened the scope of allowable ETF strategies, the number of ETFs more than doubled to 1,594 through the end of 2015.
    [Show full text]
  • Calamos Small Cap Market Snapshot
    DATA AS OF 6/30/2021 WHAT’S NEW MARKET PULSE A little early…Last month, I made the bold prediction that the small cap MONTH-TO-DATE RETURNS correction was over. However, in June, they lagged by another 57 basis points R 2000 VALUE RUSSELL 2000 R 2000 GROWTH (Russell 2000 less Russell 1000). Falling 10-year Treasury yields during the last few weeks spooked many investors into rotating away from small caps. -0.61 1.94 4.69 R MICROCAP VALUE RUSSELL MICROCAP R MICROCAP GROWTH Even so, I’m not wavering. Small cap fundamentals continue to be rock-solid -0.63 2.19 6.36 and valuations versus large caps continue to look inexpensive, sitting at the 22nd percentile. In each of the past three small cap cycle peaks, valuations versus YEAR-TO-DATE RETURNS large caps surpassed the 83rd percentile. Small caps have a long way to go. I R 2000 VALUE RUSSELL 2000 R 2000 GROWTH conclude with an amazing small cap fact: since 1989, when small caps were up 26.69 17.54 8.98 more than 10% during the first six months of the year (the Russell 2000 was up R MICROCAP VALUE RUSSELL MICROCAP R MICROCAP GROWTH 17.5% in 1H 21), they continued to rise in the second half of the year, on average by another 12%. Buy the dip! 35.65 29.02 20.57 Brandon M. Nelson, CFA, Calamos Senior Portfolio Manager RUSSELL 2000 GROWTH VS. RUSSELL 1000 GROWTH RUSSELL 2000 GROWTH VS. S&P 500 GROWTH 300-DAY PERFORMANCE GICS SECTOR ALLOCATIONS (NET) 60% 50% Russell 2000 Growth 50% 40% S&P 500 Growth 40% 30% 30% 20% 20% 10% 10% 0% 0% -10% -20% -30% -40% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Past performance is not indicative of future results.
    [Show full text]
  • Investing in the Marketplace
    Investing in the Marketplace Prudential Retirement When you hear people talk about “the market,” you might think Did you know... we agree on what that means. Truth is, there are many indexes that represent differing segments of the market. And these …there is even indexes don’t always move in tandem. Understanding some of an index that the key ones can help you diversify your investments to better represent the economy as a whole. purports to track The Dow Jones Industrial Average (The Dow) is one of the oldest, most investor anxiety? well-know indexes and is often used to represent the economy as a Dubbed “The Fear whole. Truth is, though, The Dow only includes 30 stocks of the world’s largest, most influential companies. Why is it called an “average?” Index,” the proper Originally, it was computed by adding up the per-share price of its stocks, and dividing by the number of companies. name of the Chicago The Standard & Poor’s 500 Index (made up of 500 of the most widely- Board Options traded U.S. stocks) is larger and more diverse than The Dow. Because it represents about 70% of the total value of the U.S. stock market, the Exchange’s index is S&P 500 is a better indication of how the U.S. marketplace is moving as a whole. the VIX Index, Sometimes referred to as the “total stock market index,” the Wilshire and measures the 5000 Index includes about 7,000 of the more than 10,000 publicly traded companies with headquarters in the U.S.
    [Show full text]
  • Risk-Adjusted Return Monitor Summary & Views
    a global macro investment newsletter by Neil Azous Morning Edition | October 12, 2018 Risk-Adjusted Return Monitor CROSS-ASSET FOREX FIXED INCOME EQUITIES COMMODITIES THEMATIC PAIRS India SENSEX EUR/CNY UK 5-Yr Gilt India SENSEX Soybean China Exposure EU Cyclicals vs Defensives Saudi Tadawul USD/TWD South Korea 10-Yr Saudi Tadawul Gold None EU Domestic vs EM Exposure * Highlights the largest overnight positive and negative risk-adjusted returns across 160+ market proxies Summary & Views Contents These Are Not The Droids You Are Looking For Summary & Views Top Observations . The Pedestrian View Tracking Portfolio . Our View – Mutual Funds Economic Data . Our View – Hedge Funds . Our View – Global Macro . Financial Conditions Tracking Portfolio Admin – Schedule Tracking Portfolio Twitter @sbstimestamp The next edition of Sight Beyond Sight will be delivered on Monday. Bloomberg MCRO <go> Any updates to the tracking portfolio will be sent via Twitter (@sbstimestamp) or Bloomberg (MCRO<go>). Links Subscribe Now! Newsroom View Archive Permissions/Reprints Connect Twitter @neilazous These Are Not The Droids You Are Looking For The Pedestrian View This is the 23rd correction greater than 5% in the S&P 500 Index (SPX) since the March 2009 low. The average correction is -9.3% and the median correction is -8.4%. The average VIX peak is 32.1 and median peak is 30.3. From the high-to-low, the S&P 500 fell 7.8%, and the VIX peaked at 28.84. Add in the drawdowns in other benchmarks – Russell 2000 Index (RTY) -11.29% and NASDAQ-100 Index (NDX) - 10.49% – and the dozens of intra-day indicators showing extremes, and it is easier to understand that the correction is largely complete.
    [Show full text]
  • Mr. Alp Eroglu International Organization of Securities Commissions (IOSCO) Calle Oquendo 12 28006 Madrid Spain
    1301 Second Avenue tel 206-505-7877 www.russell.com Seattle, WA 98101 fax 206-505-3495 toll-free 800-426-7969 Mr. Alp Eroglu International Organization of Securities Commissions (IOSCO) Calle Oquendo 12 28006 Madrid Spain RE: IOSCO FINANCIAL BENCHMARKS CONSULTATION REPORT Dear Mr. Eroglu: Frank Russell Company (d/b/a “Russell Investments” or “Russell”) fully supports IOSCO’s principles and goals outlined in the Financial Benchmarks Consultation Report (the “Report”), although Russell respectfully suggests several alternative approaches in its response below that Russell believes will better achieve those goals, strengthen markets and protect investors without unduly burdening index providers. Russell is continuously raising the industry standard for index construction and methodology. The Report’s goals accord with Russell’s bedrock principles: • Index providers’ design standards must be objective and sound; • Indices must provide a faithful and unbiased barometer of the market they represent; • Index methodologies should be transparent and readily available free of charge; • Index providers’ operations should be governed by an appropriate governance structure; and • Index providers’ internal controls should promote efficient and sound index operations. These are all principles deeply ingrained in Russell’s heritage, practiced daily and they guide Russell as the premier provider of indices and multi-asset solutions. Russell is a leader in constructing and maintaining securities indices and is the publisher of the Russell Indexes. Russell operates through subsidiaries worldwide and is a subsidiary of The Northwestern Mutual Life Insurance Company. The Russell Indexes are constructed to provide a comprehensive and unbiased barometer of the market segment they represent. All of the Russell Indexes are reconstituted periodically, but not less frequently than annually or more frequently than monthly, to ensure new and growing equities and fixed income securities are reflected in its indices.
    [Show full text]
  • A Tale of Two Small-Cap Benchmarks: 10 Years Later
    Research A Tale of Two Small-Cap Benchmarks: 10 Years Later Contributors INTRODUCTION Phillip Brzenk, CFA Indices play a multifaceted role in investment management. Passive Senior Director investors use indexed-linked investment products to gain exposure to Global Research & Design [email protected] particular investment universes, market segments, or strategies. Active investors use indices as benchmarks to compare actively managed funds Bill Hao to indices representing the active portfolio. Indices can also serve as Director proxies for asset class returns in formulating policy portfolios. Global Research & Design [email protected] If indices can represent passively implemented returns in a given universe, Aye M. Soe, CFA then the risk/return profiles among various indices in the same universe Managing Director should be similar. In large-cap U.S. equities, the S&P 500® and Russell Global Head of Product 1000 have had similar risk/return profiles (9.65% versus 9.73% per year, Management respectively, since Dec. 31, 1993).1 However, in the small-cap universe, [email protected] the returns of the Russell 2000 and the S&P SmallCap 600® have been notably different historically. Since year-end 1993, the S&P SmallCap 600 has returned 10.44% per year, while the Russell 2000 has returned 8.78%. In addition, the S&P SmallCap 600 has also exhibited lower volatility (see Exhibit 1). A study performed by S&P Dow Jones Indices (S&P DJI) in 2009 (Dash and Soe) showed that return differences were primarily due to the inclusion of a profitability factor embedded in the S&P SmallCap 600.
    [Show full text]
  • What Every Investor Needs to Know About Investing Internationally
    STRATEGIC GLOBAL ADVISORS, LLC What Every Investor Needs to Know About Investing Internationally In this report, you will discover what every investor needs to know about international investing and the common myths that keep investors from investing abroad. Investors who are serious about diversification will diversify not only across stocks and industries but also across countries. Investors may find more, and often better, investment opportunities when they broaden their investments worldwide rather than when they limit themselves to only one country. Are You Ignoring Over Half of the World’s Investment Opportunities? The United States’ share of the global marketplace, in terms of total market capitalization, is 42%. If U.S. investors wanted to benchmark the globe, their portfolios would have approximately a 58% exposure to foreign markets. The U.S. market share is shrinking as China, India and other emerging markets continue to grow. Share of Global Marketplace 7 YEARS AGO TODAY THE AMERICAS THE AMERICAS UK EX-US UK EX-US 14% 3% 9% 7% ASIA PACIFIC JAPAN ASIA PACIFIC EX-JAPAN 8% EX-JAPAN JAPAN 4% 11% 10% EUROPE EX-UK EUROPE EX-UK 18% 18% AFRICA/ASIA/M.E. US 1% 52% AFRICA/ASIA/M.E. US 3% 42% As of June 30, 2002. As of June 30, 2009. Source: MSCI ACWI Index, see disclosures for Index definition. Source: MSCI ACWI Index, see disclosures for Index definition. Do You Suffer From “Home Bias”?1 If you answer yes to any of the following questions, you may have a case of investor “home bias.” • Do you prefer to hold stocks that are located geographically close to you? • Do you prefer to invest in companies that use your native tongue in company reports and whose CEO shares your cultural background? • Do you tend to buy telecom stocks that are located in your state, rather than a different state? The tendency to invest locally occurs when investors know more about local industries and companies.
    [Show full text]
  • Daily-Market-Update Page 1 Date 16-Nov-2020
    Daily-Market-Update Page 1 Date 16-Nov-2020 Overnight/Asia NEWS Asian stocks and U.S. futures climbed on Monday, buoyed by positive sentiment on regional trade and signs of opposition to a national American lockdown despite surging virus cases. The dollar retreated. The Asian benchmark was on track for a record close, with Japan and South Korea outperforming. A slew of Asia-Pacific nations on Sunday signed the world’s largest regional free-trade agreement, encompassing nearly a third of the world’s population and gross domestic product. In Australia, share trading was paused due to a market data issue. S&P 500 futures extended last week’s advance after advisers to President-elect Joe Biden said they opposed a nationwide U.S. lockdown. Oil pushed higher and Treasuries were steady. On Friday, both the S&P 500 and the Russell 2000 Index of small caps rallied to all-time highs. The tech-heavy Nasdaq 100 underperformed amid the rotation to economically sensitive industries. Global stocks have recovered to pre-pandemic highs after optimism about a vaccine last week drove a rotation into value and cyclical sectors, and more defensive industries underperformed. Still, concerns about a sustainable economic recovery persist amid a flare-up in cases around the world. China remains a bright spot. Data showed the country’s economic recovery strengthened in October, with consumer spending picking up steadily and industrial production and investment rising faster than expected. The nation’s central bank added funds to the financial system to support growth. The pandemic continues to escalate in regions such as Europe and the U.S.
    [Show full text]
  • ETF/ETN Monthly Report Jan-2015
    issue month ETF/ETN Monthly Report Jan-2015 ◆Market Summary ETF/ETN trading in December remained strong, with one new ETF listing. ■ In December 2014, trading in the ETF/ETN market continued near record highs, with monthly trading value of approximately JPY 3.9 trillion and daily average trading value of about JPY 188 billion. ■ Activity in the Simplex WTI ETF (1671) grew sharply, as it rose to 18th in trading value. Other ETFs and ETNs tracking oil sector indices also saw significant gains. ■ NEXT NOTES S&P 500 Dividend Aristocrats Net Total Return Index ETN (2044), listed in November 2014, was ranked 20th overall again. ◆Trading Value - Monthly(Auction) (Dec-2014) Total(JPY) Daily Average (JPY) ◆Trading days:21 Month on Month 3,940,493,727,840 187,642,558,469 -15.34% ◆Rankings ETF 163 ● Monthly trading value (Dec-2014) ETN 27 Monthly Trading Value, Fund # Code Name Underlying index/commodity Category Monthly Change (%) Value (unit: JPY 1,000) Administrator 1 1570 NEXT FUNDS Nikkei 225 Leveraged Index Exchange Traded Fund Nikkei 225 Leveraged Index Domestic Stock Indices 2,590,240,484 -13.11% Nomura AM 2 1321 Nikkei 225 Exchange Traded Fund Nikkei 225 Domestic Stock Indices 253,902,243 -30.77% Nomura AM 3 1579 Nikkei 225 Bull 2x ETF Nikkei 225 Leveraged Index Leveraged / Inverse Index 171,281,433 -11.30% Simplex AM 4 1357 NEXT FUNDS Nikkei 225 Double Inverse Index Exchange Traded Fund Nikkei 225 Double Inverse Index Leveraged / Inverse Index 163,756,627 -11.59% Nomura AM 5 1568 TOPIX Bull 2x ETF TOPIX Leveraged (2x) Index Leveraged /
    [Show full text]
  • Quarterly Economic Update Andrew Van Erp Preferred Planning Associates
    QUARTERLY ECONOMIC UPDATE ANDREW VAN ERP PREFERRED PLANNING ASSOCIATES In this Q4 recap: waves of volatility hit Wall Street, trade pacts and disputes make headlines, oil takes a plunge, and the economy continues to perform well. Andrew Van Erp Quarterly Economic Update 513.529.6094 (Office) 513.678.6406 (Mobile) [email protected] A review of Q4 2018, Presented by Andrew Van Erp THE QUARTER IN BRIEF Wall Street saw many ups and downs in the last three months of 2018. The fourth quarter concluded with bulls and bears vying for control of the market and with the S&P 500 suffering a 13.97%, three-month loss. The Federal Reserve sent conflicting signals about its implementation of monetary policy normalization, to the frustration of investors. No real progress was made in resolving the U.S.-China trade war, and the Brexit appeared to reach a standstill. The price of oil dropped sharply. The housing market gained a bit of momentum as home prices and mortgage rates both declined. The quarter was quite newsworthy, but its major headlines raised some troubling questions about the direction of the markets. 1 Annual DOMESTIC ECONOMIC HEALTH Bill Consolidation On the whole, the economy looked quite good in the fall. Consumer spending increased Loan Special! 0.8% for October and 0.4% for November, with retail sales up 1.1% in the tenth month of the year and 0.2% in the eleventh. Retailers benefited from a great holiday sales season: Lower Your on an annualized basis, consumer purchases made between November 1 and December Monthly 24 were up 5.1% compared to the same period in 2017.
    [Show full text]