Three Utility ETFs Worth A Look

In a time when fear and uncertainty are causing the stock market to take a roller coaster ride, the attractiveness of the utility sector remains intact, and for good reason.

In general, the utility sector is known for shooting off decent dividends and carries a relatively high degree of safety. The sector remains a safe haven and tends to shine in times of uncertainty because the services that it offers are an indispensible part of life, enabling utilities to have reliable earnings streams. Read more of this post

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Two Coal ETFs Expected To See Upside

Over the past week numerous analysts have raised their outlook on the U.S. coal sector as global demand for the commodity continues to rise amidst disruptions in global supply.

According to the U.S. Energy Information Agency, U.S. coal exports rose 49% during the first quarter of 2011 from the same quarter a year ago, pushing exports to their highest quarterly levels since 1992.  This growth has primarily been supported by a recent surge in demand for steam coal, which witnessed a 160% increase during the same time period, followed by a 21% increase in coking coal exports.  Although steam coal appears to be the larger catalyst in export growth of coal, coking coal remains the primary coal export, accounting for 64% of all coal exports. Read more of this post

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

Four ETFs Likely To Be Impacted By Obama’s Energy Plan

In an attempt to address the rising costs of fuel and crude oil, President Obama stated that it is vital for the US to embark on a long-term plan to tap domestic resources and soften its dependency on foreign oil, which could potentially influence the iShares Dow Jones US Oil & Gas Expl and Prod (IEO), Oil Service HOLDRs (OIH), Market Vectors Glb Alternative Energy ETF (GEX) and the Market Vectors Uranium & Nuclear Energy ETF (NLR). 

The President specifically called for new incentives to boost production of crude oil, gas and biofuels as well as more stringent fuel efficiency standards on vehicles and further development of alternative energy solutions.  In particularly, President Obama reaffirmed his support for nuclear power and the usage of natural gas.  Although the specific incentives are still a work in progress some could include shortening lease terms, speeding up the process of securing lease and drilling permits, lowering the royalties paid to the federal government for leases and expanding production areas offshore. Read more of this post

Four ETFs To Play Rise In Gasoline Prices

As global demand for crude oil continues to increase to record levels and supply remains constricted, the price of gasoline continues to itch upwards, passing the $3 per gallon mark in October and giving support to the United States Gasoline Fund (UGA), the PowerShares DB Energy (DBE), the iShares Dow Jones US Oil & Gas Ex Index (IEO) and the Vanguard Energy ETF (VDE).

According to the American Petroleum Institute, worldwide demand for crude oil in 2010 hit a record of more than 87 million barrels per day and in the coming year this number is expected to increase as appetites in China, the Middle East and India continue to grow and witness increasing purchasing power.    Further demand support in the current year is expected to come from developed countries, such as the United States and Germany, as they continue to witness improvements in economic climate.  Read more of this post

Four ETFs To Play Canada’s Natural Resources

As global demand for natural resources remains insatiable, Canada’s vast supply of these natural resources makes it highly appealing to investors.

The democratically governed nation, just north of our border, boasts the world’s second largest oil reserve, trailing none other than Saudi Arabia, has a vast supply of natural gas and generates a decent amount of nuclear energy, enabling the nation to be a net exporter of energy.  Furthermore, Canada is the world’s largest producer of zinc and uranium, as well as a positive producer of gold, nickel, aluminum and lead, all commodities that fast-growing nations in Asia and Latin America are thirsty for.    In fact, according to a recent Barron’s article, Export Development Canada, a government agency that provides credit to Canadian exporters, forecasts 57% growth in Canadian exports to Asian-Pacific countries and lesser-but-strong growth to other emerging markets in 2011. Read more of this post

Two ETFs To Play Coal’s Appeal

Over the last year coal has been performing well as economies around the world continue to expand and demand for global energy continues to rise.  As for the future of the commodity, both microeconomic and macroeconomic factors suggest that the commodity will likely continue to remain hot.

China

In the coming year, China is expected to be a net importer of coal. This phenomenon in the Asian nation is two-fold. From a demand perspective, China continues to grow and therefore demands more coal, to generate electricity and fuel its power plants. From a supply perspective, China has been known to be the largest coal producer in the world, however, the nation in the middle of a major consolidation of its coal industry which is restricting supply. Additionally, unseasonably cold weather has increased the energy demand for home heating. Therefore, demand for coal in China will likely far outweigh supply.    Read more of this post