Tag Archives: nasdaq

Will 2016 Be Microsoft Corporation's Best Year Yet?

Image source Microsoft. Microsoft was all over the map in 2015. Its stock experienced huge moves, both up and down, earlier in the year, but has finally settled about 20% higher. The

Retail ETFs In Focus This Holiday Season

As a pioneer in retail business, the U.S. provides ample growth opportunities for all types of retail companies. From growth perspective, retail ranks among the dominant U.S. industries and employs an enormous workforce. Retail sales represent approximately 30% of consumer spending, which itself accounts for more than two-thirds of the economy. The U.S. economy is on the growth path driven by lower oil prices and an improved job market that is counteracted by certain spillover effects from the global economy. However, this is not likely to come in the way of U.S. economic growth and the labor market boom. The Federal Reserve chairwoman Janet Yellen and the president of the New York Fed William Dudley recently expressed the possibilities of a U.S. rate hike in December, the first since the 2007-09 economic crisis and recession. The key basis for the hike will be a fall in unemployment rate and the return of inflation to the Central Bank’s 2% target over the medium term. From the economic standpoint, we see a gradual improvement in the labor market, as unemployment rates have declined to the lowest level since September 2008. According to the recent data from the Bureau of Labor Statistics, the unemployment rate for November has declined to 5%, same as in October. In November, 211,000 people were hired, reflecting improved employment prospects. Given a rebounding U.S. economy, the retail space is bubbling with optimism. A gradual recovery in the housing market and manufacturing sector, along with an improving labor market and lower gasoline prices, are favoring the economy and playing key roles in raising buyers’ confidence. We expect this positive sentiment to translate into higher consumer spending. The recent U.S. GDP data (second estimate) revealed that the economy grew at a rate of 2.1% in the third quarter, despite a strong dollar and overseas weakness, while consumer spending increased 3.2%. Though the pace of economic growth decelerated from the second quarter due to inventory correction, analysts are hopeful of a pickup in momentum in the final quarter that primarily constitutes the holiday season. The holiday season is the time when retailers are on their toes, flooding the markets with offers and promotions. Apart from price-matching policies, retailers will sweep buyers off their feet with early-hour store openings, huge discounts, promotional strategies and free shipping on online purchases. Since the season accounts for a sizeable chunk of yearly revenues and profits, retailers are gung ho to drive footfall. In this regard, retailers are efficiently allocating a major portion of their capital toward a multi-channel growth strategy focused on improving merchandise offerings, developing IT infrastructure to enhance web and mobile experiences of customers, giving their stores a facelift, developing fulfillment centers to enable speedy delivery, implementing an enterprise-wide inventory management system as well as enhancing their relationship with existing and new customers. ETFs present a low-cost and convenient way to get a diversified exposure to this sector. Below we have highlighted a few ETFs tracking the industry: SPDR S&P Retail (NYSEARCA: XRT ) Launched in June 2006, SPDR S&P Retail ( XRT ) is an ETF that seeks investment results corresponding to the S&P Retail Select Industry Index. This fund consists of 104 stocks, the top holdings being Wayfair Inc. (NYSE: W ), Pep Boys – Manny, Moe & Jack (NYSE: PBY ) and Abercrombie & Fitch Co. (NYSE: ANF ), representing asset allocation of 1.44%, 1.42% and 1.39%, respectively, as of December 11, 2015. The fund’s gross expense ratio is 0.35%, while its dividend yield is 1.12%. XRT has $637 million of assets under management (AUM) as of December 10, 2015. Market Vectors Retail ETF (NYSEARCA: RTH ) Initiated in December 2011, Market Vectors Retail ETF ( RTH ) tracks the performance of Market Vectors U.S. Listed Retail 25 Index. The fund comprises 26 stocks, the top holdings being Amazon.com Inc. (NASDAQ: AMZN ), Home Depot Inc. (NYSE: HD ) and Wal-Mart Stores Inc. (NYSE: WMT ), representing asset allocation of 15.25%, 8.73% and 6.39%, respectively, as of December 11, 2015. The fund’s net expense ratio is 0.35% and dividend yield is 0.37%. RTH has managed to attract $147.2 million in AUM till December 10, 2015. PowerShares Dynamic Retail (NYSEARCA: PMR ) PowerShares Dynamic Retail ( PMR ), launched in October 2005, follows the Dynamic Retail Intellidex Index and is made up of 30 stocks that are primarily engaged in operating general merchandise stores such as department stores, discount stores, warehouse clubs and superstores. The fund’s top holdings are The Kroger Co. (NYSE: KR ), Costco Wholesale Corporation (NASDAQ: COST ) and L Brands, Inc. (NYSE: LB ), reflecting asset allocation of 5.54%, 5.25% and 5.16%, respectively, as of December 11, 2015. The fund’s net expense ratio is 0.63%, while its dividend yield is 0.71%. PMR has managed to attract $22.4 million in AUM as of December 10, 2015. Original post .

Follow T. Rowe Price With These Stocks And ETFs

With the Fed turning hawkish, several industry experts predicting 2016 as a down year for stocks, overvaluation concerns looming large and growth worries still brewing abroad, investors must be looking for the right pick in the markets. The broader U.S. market has lost over 1.2% so far this year (as of December 15, 2015) as denoted by Vanguard Total Stock Market ETF (NYSEARCA: VTI ) while global stocks are off about 4% as depicted by iShares MSCI ACWI (NASDAQ: ACWI ). At home, only tech stocks held their head high as indicated by tech-laden Nasdaq ETF’s (NASDAQ: QQQ ) 8.8% return. In such a situation, while several experts are coming up with varying views, investors can follow the American publicly owned investment firm T Rowe Price’s tech stock selections for 2016. Investors should note that none of the picks is Buy-rated as per Zacks (at the time of writing); in fact, some of these have a ‘Sell’ rating. So, if you follow T. Rowe Price’s picks, bets could be contrarian in nature. However, investors can go against the crowd via the ETF approach as it covers up one component’s weakness with another component’s strength and runs lesser risk. Below we highlight tech stock selections of T. Rowe Price and the ETFs having considerable exposure to those stocks. JD. Com (NASDAQ: JD ) – WisdomTree China ex-State-Owned Entpr ETF (NASDAQ: CXSE ) Beijing-based e-commerce company reported wider-than-expected loss in Q3 reported in November, but provided a better-than-expected fourth-quarter revenue guidance. The company’s revenues of RMB44.1 billion (US$6.9 billion) also represented a year-over-year jump of 52% in Q3. T. Rowe Price finds its valuation ‘very attractive’. The stock gained 9.6% in the last one month and is up 36.5% so far this year (as of December 15, 2015). However, the stock has a Zacks Rank #4 (Sell) as there were no upward estimate revisions by analysts in the last 7, 30 and 60 days for any of the quarters, at the time of writing. Thus, investors seeking to follow T. Rowe Price but with lower risks might opt for a basket or ETF approach. The stock has a top spot in WisdomTree China ex-State-Owned Enterprises ETF with 9.48% exposure. As the name suggests, the fund does not consider Chinese state-owned entities. Though CSXE also has a Zacks ETF Rank #4, the fund is up 0.6% in the last one month. Tesla (NASDAQ: TSLA ) – First Trust NASDAQ Clean Edge Green Energy ETF (NASDAQ: QCLN ) Electric vehicles maker Tesla has always been a hot stock, thanks to its relentless initiatives. Though its headline Q3 numbers were not very enthusiastic, Tesla is steady on deliveries of new automobiles. Also, the unveiling of Tesla’s new, more affordable Model 3 car in March 2016, may lead investors to place big bets on the stock. T. Rowe Price expects the usage of electric car to be common in 2016 and 2017. TSLA has a Zacks Rank #3 (Hold) and hails from an industry which is in the top 26% of the Zacks universe, at the time of writing. Tesla was up 3.2% in the last one month (as of December 15, 2015) but is off 0.6% year to date. The stock has 7.11% weight in the clean energy ETF QCLN. The fund has a Zacks ETF Rank #3 and was up 5.6% in the last one month but is down 12.4% year to date. In any case, the sailing should be smooth for clean energy ETFs ahead following the Paris climate summit wherein efforts to limit greenhouse emissions were widespread. Alphabet (NASDAQ: GOOGL ) (NASDAQ: GOOG ) – iShares U.S. Technology ETF (NYSEARCA: IYW ) As per T. Rowe Price, Alphabet – the publicly traded firm formerly known as Google – is gaining traction from mobile phones and the demand for YouTube. Solid revenues, stock repurchase plans and “very attractive valuation” makes Alphabet shares lucrative. This Zacks Rank #3 stock has a Growth score of ‘B’ and a Momentum score of ‘C’. GOOGL is up over 43% this year. The stock has 6.2% weight in the Zacks Rank #2 (Buy) ETF IYW. The fund is up over 3.5% so far this year (as of December 15, 2015). Applied Materials (NASDAQ: AMAT ) – Market Vectors Wide Moat Research ETF (NYSEARCA: MOAT ) Applied Materials is one of the world’s largest suppliers of fabrication equipment to semiconductor, LCD and solar PV cell manufacturers. The rise of mobile devices, better utilization of resources and the recently-announced merger with Tokyo Electron are the positives. AMAT was up over 14% in the last three months (as of December 15, 2015). This Zacks Rank #3 has a Value and Growth score of ‘B’. The stock has a 5.66% weight in the fund MOAT which is intended to offer exposure to the 20 most attractively priced companies with continued competitive advantages according to Morningstar’s equity research team. MOAT is up 1.1% in the last three months. NXP Semiconductors (NASDAQ: NXPI ) – Nasdaq CEA Cybersecurity ETF (NASDAQ: CIBR ) As per T. Rowe Price, this semiconductor company benefits big time from industrial and auto end markets. Its acquisition of Freescale Semiconductor also bodes well for the fund. The fund has a Zacks Rank #4 and a Growth score of ‘B’ and Value score of ‘C’. NXPI retreated 7.7% in the last three months. Apart from semiconductor ETFs, the stock has 5.9% weight in the cyber security ETF CIBR. The fund added over 0.1% in the last three months. Original Post