The full-year operating loss reported by the crisis hit Co-operative Bank. The U.K.-based lender was hurt by souring loans and charges relating to misconduct and legal issues, and warned it won’t make a profit in 2014 or 2015.
(Source: Wall Street Journal)
The level of cash on U.S. corporate balance sheets continues to climb to record high levels. Company balance sheets are in great shape as management teams have become more conservative following the financial crisis. Should confidence improve, companies can put this cash to work via capital expenditures to boost organic growth or acquisitions. Companies could also return the cash to shareholders in the form of dividends or buybacks.
(Source: Brinker)
$11.8 million
J.P. Morgan Chase & Co. Chairman and CEO James Dimon’s 2013 compensation, according to the Securities and Exchange Commission—37% lower than the $18.7 million he collected the previous year.
(Source: Wall Street Journal)
$9 billion
Punitive damages faced by Takeda Pharmaceutical Co. and its marketing partner Eli Lilly & Co. after a U.S. jury decided that the drug makers hid the cancer risks of their Actos diabetes drug.
(Source: Wall Street Journal)
The chance of filling out the perfect bracket for the NCAA men’s basketball tournament this year, which ended Monday with Connecticut beating Kentucky 60-54.
(Source: Wall Street Journal)
Nigeria’s nominal gross domestic product in 2013, taking it past South Africa as the continent’s biggest economy.
(Source: Wall Street Journal)
Domestic equity markets posted mixed results in March, with certain indices extending February’s gains, while others wavered. Geopolitical tensions were a key factor impacting performance, with Russia’s annexation of Crimea and the Russian army’s subsequent massing along the Ukraine border causing concern throughout Europe and Washington. Economic data remained rather sluggish, with the extraordinarily severe winter weather causing short-term distortions that extended into March. Employment gains in March were 192,000, slightly below expectations, but strong enough to indicate a further acceleration may be in the offing. The unemployment rate remained at 6.7%, even with additional workers reentering the workforce. Estimates of gross domestic product (GDP) growth in the fourth quarter were increased somewhat, to 2.6% from the prior estimate of 2.4%. Within this landscape, stocks had difficulty establishing a trend. The S&P 500 rose +0.8% for the month, and the Dow Jones Industrials gained +0.9%. However, the tech-heavy Nasdaq Composite Index struggled, declining -2.5%. The Russell 1000 Index of large cap stocks and Russell 2000 Index of small cap stocks diverged somewhat during the month, posting returns of +0.6% and -0.7%, respectively. Value stocks strongly outperformed growth stocks. In terms of sector performance, telecommunications services was the strongest performer on a relative basis, gaining +4.8%, while consumer discretionary was the poorest performer, posting a decline of -2.8%.
International equity markets also generated varied results in March. The MSCI World ex-U.S. Index declined -0.4% for the month. After a long stretch of underperformance, emerging markets finally found solid ground, and performed quite well relative to developed markets. Investors believed the adverse effects of the Federal Reserve’s tapering had been fully discounted, using low perceived valuations as a buying opportunity. The MSCI Emerging Markets Index gained +3.1% for the month. In contrast, the MSCI EAFE Index, which measures developed markets performance, dropped -0.6% for the month, with a primary reason being the aforementioned Russia-Ukraine tensions. Regionally, Latin America and Pacific ex-Japan were the best performers on a relative basis, with the MSCI EM Latin America Index and the MSCI Pacific ex-Japan Index gaining +8.8% and +2.4%, respectively. Eastern Europe and China were among the poorest performers, with results of -2.1% and -1.7%, respectively.
Fixed-income markets generally trailed off in March, as investors digested mixed economic data and statements from Janet Yellen, the Fed chairman. The Fed continued its tapering of its asset purchase program during the month, reducing purchases by an additional $10 billion. As stated above, economic data during the month was mixed, and investors strived to determine just how much weather was to blame. In this environment, the benchmark 10-year U.S. Treasury yield ended the month at 2.72%, up slightly from the 2.66% the level of February 28th. Broad-based fixed-income indices posted slightly negative results in March, with the Barclays U.S. Aggregate Bond Index easing -0.2% for the month. Global fixed-income markets were essentially unchanged, with the Barclays Global Aggregate ex-U.S. Index inching down -0.01% for the month. Intermediate-term corporate bonds were soft, as the Barclays U.S. Corporate 5-10 Year Index fell -0.1%. The Barclays U.S. Corporate High Yield Index posted a gain of +0.2% for the month. Municipals also performed relatively well, advancing +0.2%.
By Prateek Mehrotra, CIO
The sum raised by prescription-data provider IMS Health Holdings, based on its IPO pricing at $20 a share, making it the second-largest initial public offering in the U.S. this year.
(Source: Wall Street Journal)
Following is an interesting chart to spot bubbles within the stock market. Any time a sector’s weighting goes above 20%, it could signal trouble ahead. There were three instances since 1974 when the sector weightings for Energy, Technology and Financials exceeded that threshold and cause a bubble.
Prateek Mehrotra, Chief Investment Officer of ETF-MS and Endowment Wealth Management was recently quoted in Institutional Investor Magazine in an article by Trang Ho, titled “iBillionaire ETF Offers Activist Exposure in a Passive Vehicle”.
iBillionaire is an ETF that tracks and seeks to invest in the stock holdings of 21 billionaire investors such as Warren Buffett, George Soros, Carl Icahn, and others.
The excerpt that includes comments from Mr. Mehrotra states:
“I think this is a great idea. It is what I call a retail investors’ hedge fund proxy, without the 2-and-20 fee structure and/or illiquidity.” Says Prateek Mehrotra, chief investment officer of Endowment Wealth Management, a registered investment advisor in Appleton, WI, with $50 million in assets under management. Mehrotra’s model portfolios include the Global X Guru Index ETF (GURU), which has a similar investing strategy as iBillionaire. Global X Guru monitors SEC filings from a select group of hedge fund managers and buys their top holdings and rebalances quarterly. The ETF, with $529 million in assets under management, returned 47 percent in 2013, compared with 32 percent for the S&P 500. Since its June 15, 2012, start, Global X Guru has returned 57 percent, eclipsing the S&P by 17 percentage points. But so far this year, it has underperformed, falling 5 percent while the S&P has ticked up 1 percent. GURU charges an annual management fee of 0.75 percent, versus .53 percent for the average ETF, according to ETF.com.
A link to the entire article can be found at: http://bit.ly/QIPVaT
Mr. Mehrotra, MBA, CFA®, CAIA® also serves as Chief Investment Officer for ETF Model Solutions, an affiliated Third Party Strategist that provides investment outsourcing and other asset management solutions for advisors and Endowments using the firms’ ETF models.
