March 19, 2009 by: www.seekingalpha.com
With there already having been countless stories written about the Fed’s actions on Wednesday, I thought it would be helpful to point out one of the least heralded facts from Wednesday’s crazy day of trading: In less than two hours after the Fed announcement, the SPDR Gold Shares (GLD) trading volume soared, trading over 40 million shares.
Average volume for the GLD ETF over the past 60 days has been 24 million shares a day. Yesterday’s major accumulation day means that the bulls are firmly back in control, positioning GLD to make a run at $1,000 and all-time highs in the coming weeks/months. Yesterday’s volume on GLD was 59.5 million shares.
In the span of a few weeks, GLD has gone from being CNBC’s darling to now being the forgotten child, with market pros instead choosing air time with persistent calls of a bottom for equities. While the Market Vane Bullishness figures continue to remain high on Gold in the short term, I think they will go even higher as the commodity and the GLD ETF both work toward recent highs and then through their all-time highs.
As is seen in all bull markets, demand has powerfully overtaken supply. A look at the 60 day/120 minute timeframe on the chart below shows just how forceful volume was yesterday afternoon on the GLD:
NYSE:GLD
March 18, 2009 by: www.seekingalpha.com
How does the Federal Reserve’s statement today affect Treasury bonds and exchange traded funds (ETFs) that hold the government debt?
The Federal Reserve announced midday that it will begin large-scale purchases of 30-year Treasury Bonds to the tune of $300 billion over the next six months, reports David Goldman for CNN Money. This would help the government accomplish two goals, according to many economists:
- Lower interest rates on corporate debt and mortgage loans
- Maintain a critical level of support for the bond market to keep values higher
Federal Reserve Chairman Ben Bernanke has made statements that the central bank will use “all the tools” available to revive economic growth, so this move had been expected. Bernanke also left a key short-term bank lending rate at a record low of between zero and 0.25%.
Since interest rates fall as bond prices rise, the money going into 30-year bonds would help push down yields. They’ve been inching up toward 4% after falling to near 2.5% in December. Additionally, by sending prices up, the central bank could help lure more buyers to help prop up a slumping market.
Meanwhile, Bill Gross, manager of Pacific Investment Management Co.’s $138 billion Total Return Fund, upped his holdings of U.S. government debt 15%, the highest percentage since last July 2007, reports Dakin Campbell for Bloomberg.
While the government debt category includes Treasuries, Gross has said in the past that PIMCO is not interested in buying the securities. In February, Gross said it was dependent upon the Federal Reserve to buy Treasuries but that he wouldn’t follow the central bank’s lead.
ETF BASIC NEWS
March 13, 2009 at 2:05 pm by ETF.com
Wall Street may soon open its doors to the first official “doom and gloom” ETF. Harry Dent, best known for predicting the tech bubble in the late 1990s and penning the recent book, The Great Depression Ahead, will soon get his own exchange-traded fund Read more…
ETF BASIC NEWS
March 16, 2009 at 2:13 pm by ETF.com
Amid a financial crisis that has left Barclays searching for possible sources of additional capital, the company is considering selling the iShares brand to raise quick cash. The funds, which make up more than 45% of all ETF market holdings, are one of Barclays most successful and fastest growing businesses.
Dow Jones reports that the sale could tally billions of dollars, with one industry analyst valuing the iShares brand at $5.6 billion. Finding a buyer, however, may prove to be more difficult, with many possible purchasers already in financial trouble. At present, it is not known whether the sale would involve the entire iShares brand or if Barclays would seek a minority stake.
Barclays has yet to reach a decision regarding the sale of iShares; however, senior equity analyst at Morningstar, Erin Davis, argued “Barclays is pretty desperate to avoid a government stake, so it might cut off its nose to spite its face.”
ETF BASIC NEWS
March 16, 2009 at 2:21 pm by ETF.com
Investor interest in the metal has skyrocketed, with the second largest US based ETF, SPDR Gold Trust (GLD: Quote, Profile, Advanced Chart, News), showing growth in assets of 33% in 2009 alone on modest gains of $50 or 5.2% per ounce. GLD is now the sixth-largest holder of gold in the world after displacing the Swiss National Bank.
The survey of analysts, which has correctly predicted the weekly change in gold 59% of the time, is a key indicator for Bloomberg in gauging future momentum in the metals market. Gold ETFs are among the few to rise in 2009, along with other precious metal funds and safe haven investments.
In a weekly survey of 30 traders around the world, 20 advised buying the precious metal, with six analysts holding a neutral position and only four advising investors to sell.
NYSE:GLD
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