Author Archives: Scalper1

Teen Interest In Console Gaming Good For EA, Activision, Take-Two

A survey of U.S. teens showed interest and spending on console video games is climbing, boding well for game publishers Activision Blizzard ( ATVI ), Electronic Arts ( EA ) and Take-Two Interactive Software ( TTWO ). Piper Jaffray surveyed 6,500 teenagers nationwide for its 31st semiannual teen survey. Of more than 4,000 video game respondents, 78% own a current-generation game console or expect to in the next two years, up from 73% in the fall survey. Plus, teen video game spending intentions reached new highs in the survey. Piper analyst Michael Olson, in the investment bank’s research report, reiterated his overweight ratings on Activision, EA, Take-Two Interactive and retailer GameStop ( GME ). Teens in the survey expect to spend, on average, $214 this year on video games, up from an 11-year average of $152. “The rising level of interest and ownership in consoles is a clear positive for the game publishers (ATVI, EA, TTWO) and GameStop (GME) as it speaks to the console cycle’s potential to drive software growth in 2016 and 2017,” Olson said in the report Tuesday. Male teens surveyed said they allocate 20% of their overall spending on food, 15% on clothing, and 13% on video games. “Amazingly, video games ranks higher than cars (10%) and electronics (9%),” Olson said. “We believe this is yet another sign that video game consoles are not losing mindshare and, in fact, may be more popular than ever.” Current-generation game consoles include Microsoft ’s ( MSFT ) Xbox One, Nintendo ’s ( NTDOY ) Wii U and Sony ’s ( SNE ) PlayStation 4. Olson anticipates strong spending on video games in the next 12 months, driven by an uptick in the overall quality and quantity of major games. These include new titles in such popular franchises as Activision’s “Call of Duty” and EA’s “Titanfall.”

Global Manufacturing Picks Up: ETFs To Watch

The month of March will be remembered for the revival in the manufacturing sector in the world’s two largest economies – the U.S. and China. While a stronger dollar and huge capex cuts by energy companies to fight back the plunge in oil prices hurt the U.S. manufacturing sector, soft demand in the wake of global growth worries can be held responsible for the overall global slowdown. However, things took a turn in March as signs of stabilization showed up. Let’s delve deeper into the data. Finally Chinese Manufacturing in Positive If we talk of manufacturing slowdown, China comes first to mind. But after posting sluggish factory output data since July 2015, the economy posted growth in March. China’s official manufacturing purchasing managers’ index (PMI) came in at 50.2 for March , which beat Reuters’ forecast of 49.3 and February’s reading of 49.0. Any reading at or above 50 suggests expansion in activity. While this official data considers larger companies, another index, namely Caixin Manufacturing PMI, considers smaller or medium-sized companies. Investors should note that the Caixin Manufacturing PMI for March also rose to 49.7 from 48.0 in February, “marking the first increase from the previous month in a year.” Improving Trend in the U.S. A five-month long losing streak also bucked the trend in the U.S. in March. The ISM manufacturing data expanded to 51.8 in March from 49.5 in February buoyed by new orders and increased output. The data came above the Wall Street Journal’s expectation of 50.5. Out of the 18 manufacturing industries, 12 reported expansion in March. What Cooks Up in the Euro Area? Coming to the Eurozone, the Markit Eurozone Manufacturing PMI came in at 51.6 in March 2016, surpassing a preliminary reading of 51.4 and 51.2 recorded in February. The reading also bettered the forecast of 51.4 . All is not well across the globe. But noticeable improvement in the big three gives us reasons to look at the below-mentioned international industrial ETFs. Global – iShares Global Industrials ETF (NYSEARCA: EXI ) The fund looks to track the S&P Global 1200 Industrials Sector Index. The $16.2 million ETF is heavy on the U.S. which takes about 53% of the basket. General Electric (NYSE: GE ) (8.62%), 3M Co. (NYSE: MMM ) (2.93%) and Siemens AG ( OTCPK:SIEGY ) (2.56%) are the top three stocks of the fund. The fund charges 48 bps in fees. It added 0.5% in the last one month (as of April 5, 2016). China – Global X China Industrial ETF (NYSEARCA: CHII ) The Global X China Industrial ETF seeks to provide investment results of the Solactive China Industrials Index. The $3.6 million fund charges 65 bps in fees. This fund is heavy on building and construction (34.4%) and machinery and equipment (31.6%) industries. The fund has exposure to about 40 stocks. CHII added 2.9% in the last one month (as of April 5, 2016). U.S. – Industrial Select Sector SPDR ETF (NYSEARCA: XLI ) This product tracks the Industrial Select Sector Index. General Electric occupies the top spot with an 11.7% allocation, while 3M, Honeywell (NYSE: HON ) and Boeing (NYSE: BA ) have a combined exposure of over 10% in the fund. XLI has garnered $6.65 billion in assets and trades in heavy volume of 13.8 million shares per day. It has a low expense ratio of 0.14%. The fund has the highest exposure to aerospace and defense (25.3%), followed by industrial conglomerates (21.6%). The product gained 2.4% in the last one month (as of April 5, 2016). Original Post

Time To Worry About CORN ETF?

Anemic growth in the global economy and lingering concerns over macro uncertainty have dragged down overall agricultural consumption so far this year, hurting corn export sales. A cut in Chinese corn imports brought its share of troubles. And the most important deterrent – a strong U.S. dollar – is making exports expensive. This is bad news since corn is one of the most important U.S. crops and is the most important agricultural product in many states. And overall, the nation enjoys the status of the world’s largest exporter of the staple. The future of the staple doesn’t look very bright given expanding stockpiles and increasing planting given that the corn market is already oversupplied. Per the Agriculture Department report released last week, U.S. farmers are expected to sow 93.6 million acres of corn this year compared with 88 million last year, representing an increase of about 6%. The agency’s report also revealed that corn stockpiles totaling 7.81 billion bushels on March 1 were at the highest level in the past 30 years. Stockpiles were up from 7.75 billion bushels on the same date last year. With corn prices sinking to a nearly three-month low, investor focus is expected to be on the only ETF in the market that targets this important commodity, Teucrium Corn ETF (NYSEARCA: CORN ) . CORN has been down more than 4.1% so far this year (as of April 5, 2016), underperforming the broad agricultural commodity fund PowerShares DB Agriculture ETF (NYSEARCA: DBA ), which was down 2.2% and the equity-based fund SPDR S&P 500 Trust ETF (NYSEARCA: SPY ), which returned over 1.7%. Corn ETF in Detail The fund provides investors a direct exposure to corn. The fund looks to reduce backwardation and contango. The fund looks to reduce contango by spreading out exposure across the curve, as opposed to just rolling over from front month to front month. The fund will be using the second-to-expire contract (35%), the third-to-expire contract (30%), and the December contract that is following the third-to-expire contract (35%). The product is expensive as it charges 2.92% in fees per year, which is steep compared with the average expense ratio prevailing in agricultural commodities ETFs. It trades in moderate volumes of nearly 30,000 shares on an average daily basis that increases the trading cost in the form of a somewhat wide bid/ask spread. The fund has so far attracted $57.2 million in assets. CORN has fallen almost 20% in the last one year. As such, CORN currently carries a Zacks ETF Rank of 4 or “Sell”, indicating that the fund might face significant bearishness in the months ahead. So, for the time being, if investors are looking to play this commodity market, a look to other segments might be necessary. Original post