Pre-opening Comments for Tuesday November 24^th

U.S. equity index futures are mixed this morning. S&P 500 futures were up 2 points following release of the preliminary third quarter GDP report. Consensus was a gain of 2.8% versus a previous estimate of 3.5%. Actual was 2.8%. A slightly weaker U.S. Dollar following release of the report supported the futures market.

The Case Shiller home price index for September continued to show improvement on a year-over-year basis, but the improvement was less than expected. Consensus for home prices in the top 20 U.S. cities was a decline of 9.1% versus 11.3% in August. Actual was a decline of 9.4%.

Several U.S. companies reported higher than expected calendar third quarter earnings reports including Hormel, Heinz, Medtronic and Hewlett Packard.

Union Pacific slipped 2% after UBS downgraded the stock from Outperform to Neutral.

‘Tis the season for Canadian bank stocks to move higher from October to December. News from Bank of Montreal could help the sector this morning. Bank of Montreal announced better than expected fiscal fourth quarter earnings. Consensus was $0.98 versus $1.18 per share last year. Actual was $1.13 per share. In addition, the bank announced purchase of the North American Diner’s Card franchise from Citigroup. The purchase could double the size of BMO’s corporate credit card business. BMO added 1% in pre-opening trade. On the charts, BMO has been trading in a four month trading range between $49.01 and $54.75. A break above the trading range implies upside potential to $61.15.

Chart courtesy of StockCharts.com www.stockcharts.com

Strength in Bank of Montreal could spill into other major Canadian bank stocks and could help the TSX Financial Services Index move above a four month trading range between 162.75 and 181.93.

Chart courtesy of StockCharts.com www.stockcharts.com

Technical action yesterday

Technical action by S&P 500 stocks was quietly bullish yesterday. Another four S&P 500 stocks broke resistance (Conagra, HCP Inc, Northeast Utilities and SunTrust Banks) and none broke support. The Up/Down ratio improved from 2.63 to (309/115=) 2.69.

Technical action by TSX Composite stocks also was quietly bullish. Two TSX stocks broke resistance (Cogeco Cable and First Quantum Minerals). The Up/Down ratio was unchanged at (134/39=) 3.43.

Interesting Charts

Once again, the U.S. Dollar found resistance near its 50 day moving average. A test of 74.68 is imminent.

Chart courtesy of StockCharts.com www.stockcharts.com

Short term momentum indicators for natural gas continue to recover from oversold levels.

Chart courtesy of StockCharts.com www.stockcharts.com

ETF News

IndexIQ Debuts Innovative Merger Arbitrage ETF

November 20, 2009 at 1:05 pm by ETF.com

IndexIQ’s lineup of exchange-traded funds is certainly innovative, including hedge fund ETFs and strategy ETFs that are not seen elsewhere in the industry. Its new merger arbitrage ETF is just as unique, offering investors the ability to bank on the differential between current stock prices and agreed merger prices.

The new fund will be known as the IQ ARB Merger Arbitrage ETF (MNA) and will invest in companies that have announced a public takeover, according to the press release. The fund is based on IndexIQ’s proprietary IQ ARB Merger Arbitrage Index, which has produced year-to-date returns of 19.48% solely by bridging the gap between takeover announcements and completion.

The fund’s largest holdings include Starnet Networks 8.78%, BJ Services 8.28%, and Sun Microsystems at 7.89%. More than 37% of the fund is invested in cash due to a weakened acquisition climate amidst a credit crunch. IndexIQ fully expects an increase in merger activity, pointing to record amounts of cash on hand at S&P500 listed companies and decade low stock prices.

PIMCO Repairs Fixed Income Market with Actively-Managed ETF

November 20, 2009 at 12:50 pm by ETF.com

After much anticipation, PIMCO is set to launch its first actively-managed fund. The debut follows PIMCO’s publically announced desire to repair the fixed income ETF market, which is commonly a victim of front-running.

PIMCO’s newest addition, the PIMCO Enhanced Short Maturity Strategy Fund (MINT), will seek to replace low yielding money market funds by providing investors the opportunity to obtain money market style liquidity with higher yields. The fund will invest in a variety of short term debt obligations, as well as traditional money markets, but will also seek to invest in various other short term and high yield fixed income investments.

PIMCO is hoping to grab some of the $10 trillion of investable assets that are sitting on the sideline as investors ponder the future of the capital markets. A PIMCO spokesman in a press release stated “Investors are holding a lot of cash, and are compelled to look for something beyond the near-zero yields that money market funds offer.”

US Platinum Fund Hits Supply Roadblock

November 20, 2009 at 12:42 pm by ETF.com

The US Platinum Fund by ETFSecurities is still pending authorization from the SEC, but a new study may put a damper on the size and scope of the ETF, even if it is approved.

Peter Duncan from Johnson Matthey, a metals producer, indicated that if ETFSecurities is granted approval, the US market for platinum would grow larger than Europe, where a platinum ETF is already traded. The new American exchange-traded fund would create an additional 200,000 ounces of demand from investors, NASDAQ reports.

Exchange-traded funds account for less than 1/16 of the total demand for platinum and just 1/10 of the palladium demand. However, the SEC and CTFC are likely to place stringent rules on any US-based platinum fund to limit the market impact these funds may have.

Barclays Shows Responsibility with a “Genocide-Free” ETF

November 17, 2009 at 2:44 pm by ETF.com

Exchange-traded funds have encompassed practically every investing angle, but Barclays believes it can carve out a new niche with a “genocide-free” ETF. The fund would avoid areas and businesses “connected” to genocide.

The new fund may initially appear like a gimmick, but Barclays believes the new fund will be successful among socially-responsible investors. For example, one of the most prominent areas of genocide in the 21^st century is Sudan, where as many as 200,000 people have been killed in what has been strongly connected to the diamonds trade in Africa. While Barclays offered few details regarding the new fund, the issuer indicated that it would use a third-party to select a portfolio of “clean” businesses.

Barclays isn’t the only company moving towards “genocide-free” funds. Both T Rowe Price and Vanguard have made a pledge to avoid investments in areas with human rights abuses, according to Reuters. Vanguard noted that it is screening 157 of its funds to possibly remove companies with track records of abuses of human rights.

First Trust Capitalizes on Stimulus to Create Smart Grid ETF

November 17, 2009 at 2:37 pm by ETF.com

First Trust Advisors has announced the launch of its First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID), which will be the first to track electrical infrastructure technology companies.

Large infrastructure investments as part of the stimulus package have put Smart Grid technologies on the forefront of green investing. The Smart Grid is largely expected to replace the older, less efficient electrical wires that are more costly and require more energy to deliver the same amount of electricity to homes and businesses.

The index will invest in companies that are involved in the production of the electric grid, electric meters and devices, networks, energy storage, and software used by the infrastructure sector, according to a press release. The creation of an exchange-traded fund should help finance expensive R&D and implementation costs, which are some of the most capital intensive elements of the green energy movement.

iShares S&P India Nifty 50 Index Fund Starts Trading Today

November 20, 2009-Barclays Global Investors, N.A. (BGI), the world’s largest Exchange Traded Funds (ETFs) provider(1), announced today that the iShares S&P India Nifty 50 Index Fund (NASDAQ: INDY) began trading today

The new iShares Fund is designed to track the S&P CNX Nifty Index that represents the 50 largest and most liquid Indian securities listed on the National Stock Exchange (NSE) of India. iShares offers investors the widest selection of emerging market ETFs with 18 regional and single country emerging market funds, including the iShares S&P India Nifty 50 Index Fund. As of October 31, 2009, 30% of iShares total net asset flows or US$9.8 Billion has gone into emerging market and single emerging countries.(2)

ETF Industry Review – End of October

Barclays Global Investors recently released a report that summaries the industry to the end of October. Highlights included the following:

• Global ETF assets under management broke through U.S. $1 trillion, an all time high.
• The Global ETF industry had 1,859 ETFs with 3,327 listings from 97 providers on 40 exchanges around the world.
• Year to date global assets have risen by 32.5%.
• Year to date number of ETFs increased by 16.8% with 336 new ETFs launched, while 73 ETF were closed.
• There are currently plans to launch 805 ETFs
• U.S. ETF assets have hit an all time high of U.S. $640 billion
• The U.S. ETF industry had 732 ETFs.
• Year to date U.S. ETF assets have risen 28.7%
• Year to date the number of U.S. ETFs increased by 4.9% with 75 new ETFs launched, while 42 ETFs were delisted.
• Canada had 105 ETF with assets under management of $25.9 billion

Brooke Thackray on BNN Television

Brooke was on the Market Call Tonight last night. Following is a link to the show:

http://watch.bnn.ca/#clip238477

http://watch.bnn.ca/#clip238481

http://watch.bnn.ca/#clip238484

Thackray’s 2010 Investor’s Guide

Tech Talk frequently mentions Brooke Thackray and his book entitled, “Thackray’s 2010 Investor’s Guide”. The book summarizes attractive seasonal trades that are available during the year. The book can be purchased electronically or directly at Chapters, Amazon.ca, Barnes & Noble and Amazon.com. Following are links to these book stores:

http://www.chapters.indigo.ca/books/Thackrays-2010-Investors-Guide-Brooke-Thackray/9780978220037-item.html?ref=Search+Books:+%27thackray%27s%27
http://www.amazon.ca/gp/product/097822003X/ref=s9_sims_gw_s0_p14_i1?pf_rd_m=A3DWYIK6Y9EEQB&pf_rd_s=center-1&pf_rd_r=0773ED3P045NMSDK94ZA&pf_rd_t=101&pf_rd_p=465532811&pf_rd_i=915398
http://search.barnesandnoble.com/Thackrays-2010-Investors-Guide/Brooke-Thackray/e/9780978220037/?itm=1
http://www.amazon.com/Thackrays-2010-Investors-Guide-Seasonal/dp/097822003X/ref=sr_1_1?ie=UTF8&s=books&qid=1252640152&sr=8-1

Seasonal trades in the book that currently are active include Agriculture, Information Technology, Consumer Discretionary, Retail and Metals & Mining.

Disclaimer: Comments and opinions offered in this report at www.timingthemarket.ca are for information only. They should not be considered as advice to purchase or to sell mentioned securities. Data offered in this report is believed to be accurate, but is not guaranteed.

Sponsored By...

More from the network: Stock Market Outlook for September 3, 2010 Stock Market Outlook for September 2, 2010 Stock Market Outlook for September 1, 2010 Stock Market Outlook for August 31, 2010 Stock Market Outlook for August 30, 2010