Category Archives: apple

What Pushed Up These Agricultural ETFs?

Finally, soft commodities are catching up with the hard commodities this year. Several hard commodities including precious metals have made a comeback this year, but soft commodities could not keep pace with them. A stronger dollar, weak global fundamentals that are impacting the demand profile and ample supplies marred agricultural commodity investing. However, many agro-based commodities and the related ETFs have staged a recovery lately. A favorable demand-supply scenario is the major driver of this. Below, we highlight three agricultural ETFs that saw decent gains in the last one month (as of April 26, 2016) and see if the gains can last: Cocoa Cocoa prices have exhibited a wining trend lately due to supply concerns. Worries about lower yield in the mid-crop season in the key growing region of Ivory Coast led to this rise in prices. A long-drawn-out dry weather actually hit crop production. In addition, the demand scenario is also shaping up with cocoa grinding – a key gauge of cocoa demand – in Asia rising 2.9% in the first quarter of 2016. The data came in better than analysts’ expectation of a 1% rise. The double tailwinds put the cocoa market in an upward trajectory and showered gains on cocoa ETFs like the iPath Dow Jones-UBS Cocoa Total Return Sub-Index ETN (NYSEARCA: NIB ) and the iPath Pure Beta Cocoa ETN (NYSEARCA: CHOC ). Cotton Global cotton prices took a beating earlier after talks about China – one of the key growing regions of cotton – preparing to sell some of its 11 million-metric-ton cotton hoard, which is a massive chunk and enough to roil global cotton prices, per Wall Street Journal . Notably, China accounts for about 60% of the world’s cotton inventory. But the ” delay in sales of its giant state cotton reserves” by China kept supplies at check and pushed up prices. Also, raw cotton deliveries to Indian mills have declined 12% this season, giving signs of lesser production. This scenario has boosted cotton exchange-traded products like the iPath Pure Beta Cotton ETN (NYSEARCA: CTNN ) and the iPath Dow Jones-UBS Cotton Total Return Sub-Index ETN (NYSEARCA: BAL ) . Sugar Sugar prices have also recovered lately on ‘ global deficit’ concerns . As per sources, research agencies have predicted a shortfall in supplies globally for the current season that will end in September 2016 (read: Sugar ETFs Hit 52-Week Highs: Time for Sweet Returns? ). Going by a recent Wall Street Journal article, “Brazil, India and Thailand – three of the world’s top producers – are showing ongoing signs of production risk.” Inadequate moisture in these top growing counties spoiled output, especially in Asia. All these led to a reduced number of sugar-cane estimates that spurred deficit concerns and boosted the price (read: Can El Nino Boost Agricultural ETFs? ). The Teucrium Sugar Fund (NYSEARCA: CANE ) and the i Path Pure Beta Sugar ETN (NYSEARCA: SGAR ) were the major beneficiaries of this trend. Bottom Line Having said this, we would like to note that we, at Zacks, are not positive on agricultural ETFs over the medium term. Though the products have gained lately, we expect the trend to lose momentum as the latest drivers are short-lived in nature. Link to the original post on Zacks.com

Manufacturing Churns Out Slow Growth In U.S. – ETFs In Focus

U.S. manufacturing is yet to recover from prolonged sluggishness. This was indicated by the recent manufacturing report from the Institute for Supply Management (ISM). As per ISM, the reading was 50.8 in April (a reading of 50 or higher points to growth), down from 51.8 recorded in March. Economists had forecast the index to decline to 51.4% (read: ETFs to Watch on U.S. Manufacturing Revival ). Though the latest reading has come in above 50 for the second successive month and was the second best number in the last eight months, the sequential decline may subdue investors’ optimism over the sector. New orders index to 55.8% from 58.3% in March. Huge capex cuts by energy companies to fight back the plunge in oil prices and still-sluggish export demand in the wake of global growth issues kept a check on the sector. However, investors should note that export orders touched a 17-month high. A comparable industry measure compiled by Markit also point to the same trend. Markit’s final U.S. manufacturing PMI fell to 50.8% in April from 51.5% in March. As per trading economics , input costs bucked the trend at the manufacturing sector as pressures building up lately defying the prolonged trend of decline. This was because raw materials’ costs crept up leading to higher input costs. However, output prices fell resulting in reducing pricing power. Market Impact Most of the industrial ETFs were in the green post release of the manufacturing data. ETFS like the PowerShares DWA Industrials Momentum Portfolio ETF (NYSEARCA: PRN ), the iShares U.S. Industrials ETF (NYSEARCA: IYJ ) and the Industrial Select Sector SPDR ETF (NYSEARCA: XLI ) added small gains on May 2, 2016 ( see all industrials ETFs here ). Bottom Line While the latest data was nowhere near impressive, it can be seen as a slowly improving trend. ISM Employment Index was 49.2% in April versus 48.1% registered in March, revealing that the decline in employment – this time for the fifth successive month — is finally slowing. ISM noted that out of the 18 manufacturing sectors under coverage, 11 logged growth in employment in April. On the other hand, the long-tottering energy sector might be on an upward trajectory in the days to come on an oil price recovery. This can spell optimism for the manufacturing sector as a whole. Moreover, the U.S. labor market remains healthy. This should also back consumers’ purchasing power, boost demand for goods and result in higher factory activity. A still-low interest rate environment in the U.S. should also favor the industry as the sector depends on interest rates for its operations. The scenario beyond the U.S. border should also gain steam on a huge round of monetary easing. In conclusion, we would like to note that a full-fledged recovery may take more time than previously envisaged. So, as of now, it is better to bet on our top-rated industrial ETFs PowerShares Dynamic Building & Construction ETF (NYSEARCA: PKB ) – a key beneficiary of the solid construction spending in the U.S. – and the First Trust Industrials AlphaDEX ETF (NYSEARCA: FXR ) . On May 2, 2016, PKB and FXR were up 1.52% and 0.44%, respectively. Both carry a Zacks ETF Rank #2 (Buy). Link to the original post on Zacks.com

Apple Recruits SAP To Help Sell iPads, iPhones To Companies

Apple ( AAPL ) on Thursday announced a partnership with German business software firm SAP ( SAP ) to push iPads and iPhones deeper into enterprises. The deal follows similar partnerships with IBM ( IBM ) and Cisco Systems ( CSCO ), which were struck over the last two years. “This partnership will transform how iPhone and iPad are used in enterprise by bringing together the innovation and security of iOS with SAP’s deep expertise in business software,” Apple CEO Tim Cook said in a statement . “As the leader in enterprise software and with 76% of business transactions touching an SAP system, SAP is the ideal partner to help us truly transform how businesses around the world are run on iPhone and iPad.” Apple and SAP aim to create new mobile work experiences for enterprise customers of all sizes that combine native apps for the iPhone and iPad with the capabilities of SAP’s HANA platform. As part of the partnership, SAP will develop native iOS apps for critical business operations. Apple hopes enterprise applications for tablets can revive iPad sales, which have been in a prolonged slump. In the March quarter, iPad unit sales and revenue fell 19% year over year. In late-afternoon trading in the stock market today , Apple stock was down 1.2%, near 93, while SAP stock was down a fraction, near 77.