Tag Archives: management

ETFs And Stocks To Add On Solid Jobs Data

After weak back-to-back months of job growth in nearly two years, U.S. hiring numbers came in stronger than expected in October, easily dodging the impact of a global slowdown and a struggling manufacturing sector. The U.S. economy added 271,000 jobs in October, much above the market expectation of 180,000. This marks the strongest pace of a one-month jobs gain in 2015, and came from increased employment in the higher-paying sectors, in particular, professional and business services. Meanwhile, unemployment dropped to a new seven-year low to 5% from 5.1% in September, and average hourly wages accelerated nine cents to $25.20, bringing the year-over-year increase to 2.5% – the sharpest growth since July 2009. The robust data suggests that the U.S. economy is rebounding strongly after a lazy summer, and is continuing to outpace the other economies. Additionally, solid pay gains will increase consumer spending in the crucial holiday season, which will translate into stepped-up economic activities. Market Impact This has bolstered the chance of an interest rates hike, the first in almost a decade, in December. The jobs data even supports the comments of the FOMC meeting held in October and the latest Fed testimony that hinted at a December lift-off if the U.S. economy remains on track. As a result, the stock market has seen a big rotation in trade, and this trend will likely continue at least in the near term. This is especially true as investors are taking money out of the income-yielding sectors like utilities and REITs and putting them in the sectors like financials that are expected to benefit from the rising interest rates. On the other hand, yields on two-year Treasury bonds soared to the highest levels in more than five years, while the U.S. dollar climbed to a seven-month high against the basket of major currencies. Further, staffing stocks also have seen smooth trading. Given this, we have highlighted three ETFs and stocks that are the direct beneficiaries of the job gains and will likely see smooth trading in the days ahead. ETFs to Consider PowerShares DB USD Bull ETF (NYSEARCA: UUP ) A healing job market and the resultant improving economy will pull in more capital into the country and lead to appreciation of the U.S. dollar. UUP is the prime beneficiary of the rising dollar, as it offers exposure against a basket of six world currencies – the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. This is done by tracking the Deutsche Bank Long US Dollar Index Futures Index Excess Return plus the interest income from the fund’s holdings of U.S. Treasury securities. In terms of holdings, UUP allocates nearly 58% in euro and 25.5% collectively in Japanese yen and British pound. The fund has so far managed an asset base of $994.9 million, while it sees an average daily volume of around 2.1 million shares. It charges 80 bps in total fees and expenses, and added 1.2% on the day following the jobs report. The fund has a Zacks ETF Rank of 3 or “Hold” rating, with a Medium risk outlook. Deutsche X-trackers MSCI EAFE Hedged Equity ETF (NYSEARCA: DBEF ) The strength in the greenback and global monetary easing is once again compelling investors to recycle their portfolio into the currency hedged ETFs. For those seeking exposure to the developed market with no currency risk, DBEF could be an intriguing pick. The fund follows the MSCI EAFE US Dollar Hedged Index and holds 916 securities in its basket, with none accounting for more than 1.98% share. However, it is skewed toward the financial sector, which makes up for one-fourth of the portfolio, while consumer discretionary, industrials, consumer staples and healthcare round off the top five with double-digit exposure each. Among countries, Japan takes the top spot at 22%, closely followed by United Kingdom (18%), France (10%) and Switzerland (10%). The ETF has AUM of $13.9 billion, and trades in solid volume of more than 3.9 million shares a day. It charges 35 bps in fees per year from investors, and gained 0.6% on the day. DBEF has a Zacks ETF Rank of 3, with a Medium risk outlook. iPath U.S. Treasury Steepener ETN (NASDAQ: STPP ) As yield rise, bonds and the related ETFs falls. But this product directly capitalizes on rising interest rates and performs better when the yield curve is rising. The ETN looks to follow the Barclays US Treasury 2Y/10Y Yield Curve Index, which delivers returns from the steepening of the yield curve through a notional rolling investment in U.S. Treasury note futures contracts. The fund takes a weighted long position in 2-year Treasury futures contracts and a weighted short position in 10-year Treasury futures contracts. STPP charges 0.75% in fees and expenses, while volume is light at around 1,000 shares a day. Additionally, it is an unpopular bond ETF, with AUM of just $2.5 million. The note surged 2.4% following the robust jobs data. Stocks to Consider In the stock world, the direct beneficiary of healthy hiring is the staffing industry. The industry bodes well at least in the near term, given the superb Zacks Industry Rank (in the top 5%) at the time of writing. Investors seeking to ride out the optimism could look at a few top-ranked stocks having a Zacks Rank #1 (Strong Buy) or #2 (Buy) with a Growth Style Score of B or better using the Zacks Stock Screener . Cross Country Healthcare Inc. (NASDAQ: CCRN ) Based in Boca Raton, Florida, Cross Country is a leading healthcare staffing services’ company which primarily focuses on providing nurse and allied, and physician staffing services and workforce solutions to the healthcare market. The stock has seen solid earnings estimate revisions of 7 cents for the current quarter over the past 30 days. Full-year earnings are expected to increase at a whopping rate of 286.1% versus the industry average of 19.4%, reflecting massive growth prospects. The stock rose 7.3% in Friday’s trading session, and currently has a Zacks Rank #1 with a Growth Style Score of “A”. Heidrick & Struggles International Inc. (NASDAQ: HSII ) Based in Chicago, Illinois, Heidrick & Struggles International is one of the leading global executive search firms. With years of experience in fulfilling clients’ leadership needs, it offers and conducts executive search services in every major business center in the world. The stock has seen upward earnings estimate revision by a couple of cents for the current quarter over the past one month. The company is expected to post earnings at a growth rate of 179.3% annually this year. HSII gained 3.7% on Friday, and has a Zacks Rank #1 with a Growth Style Score of “A”. TrueBlue Inc. (NYSE: TBI ) Based in Tacoma, Washington, TrueBlue is a leading provider of staffing, recruitment process outsourcing and managed services in the United States, Canada and Puerto Rico. This company has also seen rising estimates of four cents for the ongoing quarter, and expects to grow earnings at rate of 24.5% annually for the full year. The stock was up 3.7% in the Friday session, and has a Zacks Rank #2 with a Growth Style Score of ‘B’. Original Post

5 Best-Rated T. Rowe Price Mutual Funds For High Returns

T. Rowe Price is a renowned publicly owned investment management firm, headquartered in Baltimore, Maryland. The company was founded in 1937 by Thomas Rowe Price, Jr. The company manages assets worth $725.5 billion (as of September 30, 2015). It prides itself in having more than 5,000 employees across the world. The company offers a full range of investment planning and guidance tools. It also offers mutual funds, subadvisory services, retirement plans and separate account management for individual clients. Below, we share with you 5 top-rated T. Rowe Price mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the fund to outperform its peers in the future. T. Rowe Price Financial Services (MUTF: PRISX ) seeks both capital growth and current income. The majority of its assets are invested in companies in the financial services sector. PRISX may also purchase securities of companies with significant linkages to the sector. The T. Rowe Price Financial Services fund returned 7.9% in the last one year. As of September 2015, this T. Rowe Price mutual fund held 87 issues, with 4.41% of its total assets invested in Citigroup Inc. T. Rowe Price Mid-Cap Growth (MUTF: RPMGX ) maintains a diversified portfolio by investing a large chunk of its assets in companies having market capitalizations similar to those listed in the S&P MidCap 400 Index or the Russell Midcap Growth Index. RPMGX invests in companies having above-average growth potential. Though RPMGX focuses on acquiring common stocks of domestic companies, it may also invest in companies located outside the U.S. The T. Rowe Price Mid-Cap Growth fund has returned 12.6% over the past one year. RPMGX has an expense ratio of 0.77% as compared to a category average of 1.28%. T. Rowe Price Global Technology (MUTF: PRGTX ) invests the majority of its assets in companies which expect to derive a large proportion of their revenues from the development and application of technology. PRGTX generally invests in at least 5 countries and allocates 25% of its investments to stocks of companies located outside the U.S. The T. Rowe Price Global Technology fund has returned 21.8% over the past one year. Joshua K. Spencer is the fund manager and has managed PRGTX since 2012. T. Rowe Price International Discovery (MUTF: PRIDX ) seeks capital growth over the long term. PRIDX invests a large share of its assets in foreign companies and purchases stocks issued from both mature and emerging markets. PRIDX focuses on investing in small and mid-cap companies. The T. Rowe Price International Discovery fund has returned 8.9% over the past one year. PRIDX has an expense ratio of 1.21% as compared to a category average of 1.53%. T. Rowe Price Health Sciences (MUTF: PRHSX ) invests a major portion of its assets in common stocks of companies whose primary operations are related to health sciences. PRHSX focuses on investing in large and mid-cap firms. PRHSX may also invest in non-U.S. securities. The T. Rowe Price Health Sciences fund returned 16.7% over the last one-year period. Taymour R. Tamaddon is the fund manager and has managed PRHSX since 2013. Original Post

2 Investing Implications Of Higher U.S. Rates

Real U.S. rates have been climbing, while rates are falling in much of the rest of the world. As Russ explains, this divergence has a number of implications for investors. sergey nivens / Shutterstoc While U.S. economic data continue to come in mixed, the numbers still point to decent U.S. economic growth . That, along with some evidence of stabilization in international markets, has pushed the odds of a December interest rate hike by the Federal Reserve (Fed) higher. As a result, real U.S. rates have been climbing. As I write in my latest weekly commentary, ” Digesting the Implications of Higher Rates,” I expect the rise in long-term rates in the U.S. will be contained , given several factors, including demographic trends and institutional demand for long-term, high-quality bonds. But the fact that U.S. rates, both long and short term, are rising while rates are falling in much of the rest of the world has a number of implications for investors. 1. The dollar will continue to strengthen, keeping pressure on precious metals. Over the past six weeks, while U.S. rates have risen, rates have declined in Germany, Italy and Japan, according to data accessible via Bloomberg. Looking forward, we will likely continue to see a divergence between U.S. and international short-term rates as central banks in these regions maintain easy money while the Fed tightens. This rate divergence helps explain the renewed strength in the U.S. dollar, which last week reached its highest level since the spring, as Bloomberg data show. The combination of a strong dollar and rising real rates is having a predictable effect on precious metals prices. The simultaneous rise in real and nominal rates reflects the fact that inflation is contained and that puts downward pressure on the price of precious metals (since they are viewed as an inflation hedge, but provide no income, they consequently become less attractive). This time is no different, with gold and silver trading back down toward their summer lows, below $1,100 per ounce for gold, according to Bloomberg data. Given this environment, I remain cautious on precious metals. Still, having a hedge against inflation in a portfolio is a sound strategy, and I prefer Treasury Inflation Protected Securities in that role. 2. A stronger dollar supports the case for hedged currency exposure in international stocks. I continue to like international developed markets , such as Europe and Japan. However, a strong dollar can erode the local gains made in international stocks. As such, given my expectation for further dollar appreciation, I believe investors should use vehicles that hedge most or all of their international currency exposure. This post originally appeared on the BlackRock Blog.