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February ETF Update: Biggest ETF Gainer In Last Month: SPY
We have closely tracked the Q4 bank influx into the SPY ETF, which on ever declining volume breadth has become the one most dominant market determining factor, on both a push and a pull basis. It is no surprise that in February the SPY was once again, by a wide margin, the biggest source of capital inflows in the equity ETF space. As the chart below from Invesco demonstrates, institutions that still have remaining cash, ploughed over $1.5 billion into the SPY, which now has over $70 billion in net assets. Ironically this occurs as on a YTD basis US Market Cap-related ETFs have seen over $14.5 billion in net outflows, as virtually all equity ETF exposure has been broadly shunned.
The biggest February loser, with over $2.4 billion in outflows was the iShares MSCI Emerging Market ETF. Several other ETFs focusing on China, and commodities followed suit in the loser category.
Going back to the debate of where investors have been parking their cash by investment objective, Fixed Income continues to lead with $2.7 billion and $5.8 billion in February and YTD inflows, compared to US Market Cap ETFs which have seen an outflow of $14.5 billion YTD. In fact through February outflows across virtually all equity class ETF have been negative, which makes one wonder, once again, where has the buying power to return the market back to positive YTD levels come from?
Here is the brief market commentary from Invesco regarding February performance:
After declining 4.4% in January, global equity markets rose 1.1% on mixed performances across various regions. Except for a few emerging market regions, the U.S. equity market was the top performer returning 2.9% on the month. World ex-U.S. performance was slightly down on the month largely affected by the strength of the U.S. dollar relative to the pound and euro. (Figure 5)
European equities were roughly flat on the month in local currency, but were down 2.2% in USD terms. Emerging markets were slightly up on mixed results. Russia and Korea continued their YTD decline but Brazil, India and China all posted increases on the month. In a strong reversal from the prior month broad commodities were up 3.5% led primarily by oil which was up 9.3%. (Figure 5)
Micro data on stocks remained strong but there were mixed signals coming from macro economic data. U.S. companies showed strong results from the fourth quarter with earnings up 44% from the Q3 2009 trough. Seventy-three percent of companies beat their earnings expectations by an average of 16% while only 18% fell short. Also on the positive side, U.S. GDP numbers for Q4 2010 were revised up to 5.9%.
On the negative side, existing home sales in the U.S. dropped unexpectedly by 7.2% and consumer confidence fell to its lowest level in 10 months. The U.S. labor market is still struggling with the expectation that the government will report a 50,000 drop in payrolls for February and an unemployment rate of 9.8% in its March 5th report. The mixed data continued to cause uncertainty in the markets leading to the differentiated performance across regions and asset classes in February.
h/t Stephen
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Let's give credit where credit is due. Clearly, SPY must have a great sales and marketing team. This relative growth is going to make a great bullet point on some resumes.
Alternatively, someone at State Street was college roommates with someone on the PPT.
Ouch -- another day with a bull horn up my arse.
Oh, sorry, it is not a bull horn. It is just me standing behind you. Common mistake.
This bull has had its way with many of us. Waiting for "when this bubble bursts" has been an excruciating experience.
Were you really shorting this market?
Look, ZH is a brilliant blog for economics, but it's a terrible place to turn for trading advice.
No matter what you think of the economy, build solid algorithms, backtest them, and let them trade for you, and be disciplined about it.
The market is a battlefield that's been taken over by robots. Flesh can't hope to compete.
I have shorts and longs.
Threadjack: Who can find video of this staged Prius incident from bloomberg this morning?
http://www.lewrockwell.com/blog/lewrw/archives/52645.html
Staged??? WTF are you smoking?
Seriously, how cognitively deficient do you have to believe that a Toyota -- which has been shown on many occasions to have accelerator problems, particularly in the Prius model -- can't possibly have had yet another out-of-control Prius incident, and that it's all some vast conspiracy to sink Toyota!
No new material?
Google: http://tinyurl.com/ybs8gt6
You've been reading too much KD. You sound just like him.
OK, I'll bite.
Yes, staged. Nothing (quit smoking in 2000).
I never claimed that Toyota "can't possibly have had yet another out-of-control Prius incident, and that it's all some vast conspiracy to sink Toyota!".
I claimed that this incident was staged. I based that on the following circumstantial evidence...
* This incident made headlines the same day of Toyata's press conference and most media reported it as one story.
* Supposedly, a police cruiser was used to stop the prius by allowing the driver to hit the back of it. However, in all the news footage (even the footage that appears to show the cars posed together), there is no damage - even slight damage - to either car.
* News cameras were on the scene before the tow truck even got there.
* The interview.
AP Coverage: http://www.youtube.com/watch?v=1P1V-DH4djw
More: http://www.youtube.com/watch?v=EQ0aVipFR34
Something smells.
So what?
Sure, why not? Maybe the cop in the police cruiser was very skilled and brought it to a slow, gradual stop. In that case, the front of the Prius would deform but not be
OK, so the tow truck was slow to arrive. What's that got to do with anything?
What about it?
Seriously, have you no critical thinking skills whatsoever? Are you that desperate for conspiracy that you even need to make THIS some kind of elaborately staged event?
I don't know about you, but for my part, I usually wait for at least a tiny smidgen of hard evidence before jumping up from the jury box and screaming "Guilty!"
"It all seems too convenient" = FAIL
Again you bring up this "conspiracy" that no one else is talking about.
I listed the circumstantial evidence that leads me to believe it was staged. There aren't even any visible paint scratches on the front of the prius so I don't undertsand what you mean by "deformed". There is no way the incident happened as reported unless the cars involved were not the cars pictured (did you see the undamaged prius?).
http://i43.tinypic.com/2ntbmsk.jpg
Do you really think a couple pics and a few soundbites is an "elaborately staged event"? Hyperbole maybe?
I never claimed to have proof of anything. I stated my opinion and the reasons for having that opinion. Your theory about the skilled driver does not jive with the pics of the prius (no damage or even deformation) nor the reported story so, as of now, my opinion conforms to what we know, yours does not. It's very possible the media isn't being truthful but that would raise more questions than it answers.
It's a good thing you're not in science. You'd be telling everyone their theories are "fail" because there is no "conclusive proof".
["OK, so the tow truck was slow to arrive. What's that got to do with anything?"]
No, the media was quick to arrive. Officer and driver were still on the scene blocking a lane of traffic when they arrived.
And why are you quoting someone else in response to me? I can't even find that quote in this entire thread. Do you know what quotes are used for?
See I can also Appeal to Ridicule.
The Federal Reserve is a Den of Thieves. Filthy Fucking Thieves!
Interesting to see that SDS is ranked 6th in net inflows.
Yes, some tears and pain behind that number I'm sure.....
i can't wait to say i told you so when this falsely propped up p.o.s. collapses.
bernanke strategy: inflate out of deflationary spiral.
inflate housing? um, no, didn't work.
inflate lending? um, no, didn't work.
inflate job production? um, no, didn't work.
inflate commodities? yes! that's why we have 3 dollar gasoline.
inflate stocks? yes! looks good to j6p so all is well.
inflate bank health? um, kinda, cuz we got 157 and an exemption to extend and pretend regardless of cre collateral values.
and this guy is the expert on the depression?
Those criminal fuckers are doing a good job of inflating my shorts.
Hahaha, a "healthy" economy for sure:
http://money.cnn.com/2010/03/09/pf/retirement_confidence/index.htm
It's ok, Goldman and Co. will be good custodians of all of the money they have stolen from you America.
I primarily utilize the SPY, via the options market, to hedge long exposure. It is apparent there is a a much larger bid underneath the SPY than the corresponding components of the S&P 500. In other words, as discussed countless times on ZH, it is apparent to me that the SPY is bid in order to create a self-fulfilling prophecy...
While never exactly equal, it seems that the SPY is typically reflecting 3-5 "points" on the S&P 500. For example, presently the S&P 500 is at 1144.75 while the SPY is at 114.9. This implied difference is 4.25 on the S&P 500.
Manipulation is only allowed in one direction...
Take off the tinfoil hat and calculate the value of the accrued dividends from the component companies that has yet to be paid out, and you will see that SPY is trading at fair value.
http://finance.yahoo.com/q?s=%5ESPY-TC is the estimated cash value per creation unit - which is a block of 50K shares.
$21,463.90 / 50,000 = $0.43 per share of SPY
> It is apparent there is a a much larger bid underneath the SPY than the corresponding components of the S&P 500
Nonsense. The volume of the top 10 components by market cap is higher than the SPY pretty much every day... and that still leaves 490 to go.
The futures market leads SPY and the cash market leads SPY... but the time lag is measured in micro-seconds.
So, when the SPY is purchased, do they not issue SPDRs and therefore purchase the underlying S&P 500 components?
> So, when the SPY is purchased, do they not issue SPDRs and therefore purchase the underlying S&P 500 components?
No.
The purchase of the underlying 500 companies is done by an "authorized participant" who purchases the 500 companies in the proper ratios then hands to State Street the shares of the 500 companies along with the cash value per share (as reported to the DTCC each night) and asks for a "creation unit" of 50K SPY to be created (or the reverse transaction where 50K units of SPY are converted into the underlying 500 company shares and cash).
State Street does not daily buy and sell the components of SPY. They simply sit there, collect their 0.2% annually, pay out accrued dividends from time to time, and convert underlying component shares from a well defined daily "portfolio composition file" into new blocks of 50K SPY, or vice versa for a select group of "authorized participants".
SPY is trading at 30% above
historical fair value, moron.
Fair value for SPY is derived by computing the appropriate weightings for the components (which mirror SP500 constituents) and adding in accrued dividends.
As such, it is trading within a penny of fair value. That statement says nothing about the fundamentals of the underlying components and their respective trading ranges.
Now, if you want to say that the SP500 is "30% above historical fair value", fine - but you are making a comment about the 500 index constituents - whereas I am talking about the potential arbitrage between SPY and the 500 components (which is almost always less than 1 penny).
If Exxon and the next 499 components of the SP500 index are at their current values, then SPY is fairly valued.
And if you don't understand that, then it is you who is the moron.
Finally someone who knows what they are talking about in a mirco market structure sense. Thank you
Finally someone who knows what they are talking about in a mirco market structure sense. Thank you
The 4 or 5 banks trading SPY can have it. Let them
fight it out. Nobody else wants any. Even lowly
Joe Sixpack knows the recovery is a fraud.
Sell side pumpers say go long. Everybody wants to
go from 26% overvalued to 36% overvalued so they can
get paid and call it a year.
please explain why they are shifting out of gold miners (and also why out of oil and natural gas).
didn't you just put out an article today mocking some guy saying that gold is a bubble. you cited that hedge fund are poring into gold...
Yes, the S&P 500 is widely followed. But also some other indices tracked through leveraged ETFs which are up double digits in the last couple of weeks.
time123
Invetrics called the bottom in March 2009: http://invetrics.com/?p=973
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