Four Reasons To Short Solar ETFs

The solar energy sector continues to witness whipsaw action and downward price pressure throughout the industry is likely to prevail in the near-term future as supply and demand imbalances continue to widen. 

Fundamentally speaking, the sector has numerous headwinds and continues to remain weak.  As a whole, the sector has been plagued by falling prices, inventory buildups and extension of credit terms.  In fact, Stephen Simko of Morningstar suggests that the industry will likely bottom out in the coming months despite witnessing increased global installation activity due to lackluster demand, which will make it very difficult to reduce inventory levels and keep factories running at high utilization rates. Read more of this post

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3 ETFs Impacted By Durbin Amendment

The Durbin Amendment seeks to reduce credit and debit card networks from imposing anti-competitive restrictions and high transaction fees on small businesses, merchants and government agencies and could provide positive support for some large-cap and regional banks. 

More specifically, the Durbin Amendment is aiming at preventing both MasterCard (MA) and Visa (V), who constitute roughly 80 percent of all credit and debit card transactions, from continuing to increase debit card interchange fee rates.  To regulate the fee structure, the amendment would direct the Federal Reserve to issue regulations to ensure that interchange fees imposed are “reasonable and proportional” to the cost incurred in processing the transaction.  Read more of this post

Two ETFs To Play Indonesia’s Appeal

As many investors seek to find the next emerging opportunity, the Asian nation of Indonesia may be the answer to their prayers.

According to Liem Denning of the Wall Street Journal, Indonesia is the next Brazil, which was the best performing BRIC nation over the past five years and is ripe for exponential growth.  A major driver behind Indonesia’s appeal is the fact that it is flush with natural resources.  The Southeast Asian nation is the world’s largest exporter of thermal coal and palm oil and has an ample supply of crude oil, natural gas, tin, copper and gold.  Read more of this post

Tight Supply May Boost Rare Earth ETF

In the first five months of this year, exports of rare-earth metals from China dropped more than 8 percent from a year earlier, indicating that the economic powerhouse is tightening control and global market supply which could provide positive price support to the Market Vectors Rare Earth/Strategic Metals ETF (REMX).

Although rare earth metals can be found in parts of the world, as of today, China has a monopoly on them accounting for nearly 95 percent of global production.  Therefore, when China reduces exports of the metals, a global supply constraint could emerge.  Read more of this post

4 ETFs To Play Rising Meat Prices

Imbalances in supply and demand continue to take its toll on food prices as the price of meat continues to rise, giving positive support to the PowerShares DB Agriculture Fund (DBA), the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (COW), the Market Vectors Agribusiness (MOO) and the PowerShares Global Agriculture Portfolio (PAGG).

According to the United Nation’s Food and Agriculture Organization’s meat index, beef and sheep prices are at an all time high and poultry and pig meat costs are on the rise. On the demand side, demand in much of the developed world like the US remains intact, while demand in the developing world for meat continues to rise.  According to the US Department of Agriculture, demand in Asia, in particularly South Korea, Hong Kong and China continues to rise.  Furthermore, demand is expected to remain elevated in the near-term future as disposable income in developing nations continues to increase. Read more of this post

4 ETFs To Play Increased Economic Uncertainty

Last week numerous indicators enhanced economic uncertainty in the US, sending the Dow Jones Industrial Average to its longest streak in nearly seven years and all 10 of the S&P 500 Index groups down.

Enhanced economic uncertainty was primarily driven by three major forces.  The first was a decline in the Conference Board’s measure of consumer confidence.  For the month of May, the index dropped by nearly 7.9% from the month before reaching a six month low.  Furthermore, the Conference Board indicated that consumers remain overly pessimistic about the labor markets during the next six months.  Read more of this post

4 ETFs Hit By Falling Home Values

According to the S&P/Case-Shiller index of property values in 20 major cities, the housing sector continues to face headwinds and remains in a slump.

The index fell 3.6 percent from March 2010 to March 2011, marking the largest year-over-year decline since November 2009 and reached its weakest point since March 2003.  Furthermore, pending sales of previously owned homes dropped a whopping 12 percent in April from the prior month, forcing many home builders to be wary of when a recovery could be in sight.  Read more of this post