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CBO-Monthly Budget Review for January 2014
February 7, 2014--The federal government ran a budget deficit of $184 billion for the first four months of fiscal year 2014, CBO estimates-$107 billion less than the shortfall recorded in the same span last year. Revenues are higher and outlays are lower than they were at this time a year ago.
Without shifts in the timing of certain payments (which otherwise would have fallen on a weekend), the deficit for the four-month period would have been $141 billion less this year than it was in fiscal year 2013. If lawmakers enact no further legislation affecting spending or revenues, the federal government will end fiscal year 2014 with a deficit of $514 billion, or 3.0 percent of gross domestic product (GDP), CBO estimates. That figure compares with a deficit of $680 billion, or 4.1 percent of GDP, in 2013.
view the CBO Monthly Budget Review for January 2014
Source: Congressional Budget Office (CBO)
First Bridge Feb 2014 ETF Landscape Report
February 7, 2014--Key highlights from our Feb 2014 ETF Landscape & Risk report:
ETP assets in the US fell to $1.64T as of January 31 2014 due to outflows and market declines. Equity ETFs saw total assets decline by $60.9b while bond ETFs saw assets increase by $2.9B.
January was marked by a sharp rise in the VIX, indicating that investors expect increased equity market volatility in the next 30 days. Some investors may want to evaluate low volatility ETFs as a way to stay invested in equities while reducing the magnitude of a potential drawdown relative to traditional market cap weighted equity ETFs.
2013 was a historically bad year for the Yen, so hedging against a falling Yen was a very effective strategy. That trend has reversed in 2014 YTD, with an appreciating Yen. However investors in emerging market equities may want to consider currency hedged ETFs if those currencies continue to depreciate vs. the USD in 2014.
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Source: First Bridge
Investors Bolt From Stock Funds Into Bonds
Money Began to Flow Back Into Bond Funds in January after Seven Straight Weeks of Outflows
February 6, 2014--Investors swapped out of U.S. equity funds and into bonds at the fastest clip on record last week, according to Lipper Inc., as they grasped for safety while the stock market swooned.
Traditional U.S. stock mutual funds and exchange-traded funds together saw withdrawals of $18.8 billion in the week ended Feb. 5, their biggest weekly withdrawals on record. The abrupt reversal, led by ETFs, comes after U.S. stock funds attracted $172 billion in 2013, the biggest inflow since the financial crisis.
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Source: Wall Street Journal
ROBO-STOX(TM) Global Robotics And Automation ETF Achieves More Than $75 Million In Assets Under Management
Fund's Rapid Growth Could Suggest Strong Investor Interest in Robotics Sector's Accelerating Progress
February 6, 2014--ROBO-STOX LLC, the world leader in developing investment solutions targeting the robotics and automation space, has announced that the ROBO-STOX(TM) Global Robotics and Automation Index ETF (Ticker: ROBO) grew to more than $75 million in assets under management as of January 28, 2014.
The Fund became available to investors on NASDAQ through the Exchange-Traded Concepts platform on October 22, 2013, and as of February 4, 2014, the Fund's shares were trading at 2.8 percent above their $25 initial public offering.
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Source: ROBO-STOX LLC
DB-Synthetic Equity & Index Strategy-North America-US ETF Market Monthly Review-Market sell-off and strong outflows removed 3.4% from US ETP assets
February 6, 2014--Data in this report is as of Friday, January 31st,2014
US ETP assets dropped by $57.5bn
ETP assets in the US dropped by $57.5bn to $1.620 trillion (YTD -3.4%) last month. Global ETP industry assets closed at $2.193 trillion (YTD -3.0%)
Flows Review: International DM equity allocations remain resilient
US ETPs experienced outflows of $15.2bn during January (-0.9% of last month's AUM).
Within long-only ETPs,total flows were -$16.1bn in January vs. +$19.6bn in December. Equity,Fixed Income,and Commodity long-only ETPs experienced flows of -$15.4bn,+$0.4bn and -$0.7bn,respectively.
Long-only equity products were highly influenced by US (-$14.2bn) and EM focused ETPs (-$9bn); however,based on the products that experienced the majority of the outflows we believe that most of the US outflows were driven by short term repositioning rather than a reallocation away from the US; while in the case of EM,market stress just exacerbated the preexisting flight of assets the segment was already experiencing. On the other hand,international DM ETPs (especially the European-focused ones) remained resilient and managed to gather healthy inflows of $7.3bn; furthermore,ETPs benchmarked to the Japanese market have yet again captured the largest flows among single country exposures (+$0.6bn). Meanwhile,on the Fixed Income space,we saw allocations favoring Short Duration with $1.0bn in net creations,and broad exposure (+$1.2bn) ETPs; Lastly,Gold ETPs experienced another month of net redemptions (-$0.7bn) despite recording a positive performance during last month; however the outflow trend did slow down.
New Launch Calendar: beta,smart-beta and active strategies
There were twenty-five new ETFs listed during the previous month. Twenty-one of them were listed in the NYSE Arca and the remaining four were listed in NASDAQ. The new products offer exposure to beta,smart-beta and active strategies covering the two major asset classes; within equities,new offerings include currency-hedged,leveraged,MLPs,US,dividend,growth and value; meanwhile,the new fixed income offering includes short,mid and long term allocation,global credit and municipals.
Turnover Review: Floor activity increased by 17.8% in January
ETP turnover totaled $1.416 trillion last month,17.8% (+$213.9bn) higher than the previous month figure of $1.202 trillion,and 14.2% above last year's monthly average of $1.240 trillion. Equity,Fixed Income and Commodity ETPs turnover increased by $208.4bn (+19.5%),$2.4bn (+3.0%) and $0.5bn (+1.3%) during January,respectively.
ETP trading made up 24.8% of all US cash equity trading in January,down from last year's peak of 32.0% in June,and still below its 3-year monthly average of 28.0%.
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Source: Deutsche Bank-Synthetic Equity & Index Strategy-North America
BATS Global Markets Announces Combined Executive Team
Chris Isaacson Named EVP, Global CIO; Bryan Harkins Named EVP, Head of U.S. Markets
February 5, 2014-- BATS Global Markets, Inc. (BATS) today announced its combined executive team, effective with the January 31st close of the company's merger with Direct Edge Holdings.
As previously announced, Joe Ratterman will remain BATS Global Markets CEO with William O’Brien joining as President. Mr. Ratterman, a co-founder of the company, and Mr. O’Brien, who joined Direct Edge as CEO in 2007, will remain based in Kansas City and New York, respectively. They will also serve as two members of the recently formed BATS Executive Committee, a group which will also include (in alphabetical order):
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Source: BATS
CFTC's Weekly Swaps Report Update
February 5, 2014--CFTC's Weekly Swaps Report has been updated, and is now available
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Source: CFTC.gov
UPDATE 2-Moody's upgrades Mexico to coveted A grade sovereign rating
February 5, 2014--Mexico became only the second country in Latin America to earn a coveted "A" grade sovereign rating as Moody's upgraded it on Wednesday, citing a raft of economic reforms that President Enrique Pena Nieto has pushed through Congress.
Mexico's peso and leading share index both turned positive after the upgrade, which should help lower the country's borrowing costs.
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Source: Reuters
Banks urge US Treasury to take bigger role in debt sales
February 5, 2014--Wall Street banks are urging the US Treasury to play a more active role in how the country's debt is sold, encroaching on the turf of the Federal Reserve Bank of New York.
Since the demise of MF Global in 2011, the Fed has not approved any new primary dealers to help underwrite debt sales io the world's biggest bond market.
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Source: FT.com
CFTC's Division of Swap Dealer and Intermediary Oversight Provides Additional Guidance to Futures Commission Merchants and Depositories Regarding Procedures for New Filing Requirements
February 5, 2014--The U.S. Commodity Futures Trading Commission's (Commission or CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) issued a notice today to provide market participants with additional guidance regarding the procedures for submitting to the Commission
the notices and reports required under new and amended regulations the Commission adopted November 1, 2013.
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Source: CFTC.gov
