Today in the Wall Street Journal, there is an article, “Airlines Retreat on Fuel Hedging“, that highlights the losses airline companies suffered by hedging against oil and gas rises. However, the article also points out that not all airlines hedged, including American Airlines Group (NASDAQ: AAL), who enjoyed the benefit of cheaper fuel. Scott Kirby, president of…
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Today’s Pending Home Sales for June month-over-month came in lower than the expected 0.5% at a -1.1%. The prior May number was a 6.1% later revised to a 6.0%. Tomorrow the S&P/Case-Shiller 20-City Composite Home Price Index is due for release at 9am. Heading into the release, the spread of the S&P/ISDA CDS U.S. Homebuilders…
Today’s Wall Street Journal brought the latest in a string of articles suggesting that we have entered a period of particular opportunity for active investment management — a so-called “stock-picker’s market.” Because the average correlation of stocks within the S&P 500 or other major indices has declined, it’s argued, “active managers are going to do…
Yesterday’s Wall Street Journal offered a profile of fixed income investors who aim to “break [the] chains” by which they are supposedly confined by index benchmarks. As the bond market falters, investors are seeking shelter in funds that aren’t tied to indexes. These bonds funds are known as “unconstrained,” “go-anywhere,” “absolute return” or “flexible” funds,…
This morning’s Wall Street Journal brought word that the Dow Jones Industrial Average, which reached nominal all-times highs earlier this month, was in fact still 1% below “the record that counts,” which record is argued to be the all-time high in inflation-adjusted terms. The analysis uses the price of the Dow Industrials (e.g., last Friday’s…
This morning’s Wall Street Journal cites an adviser who opines that “the current stock market environment favors…active fund managers, who pick individual stocks in an attempt to beat broad market indices.” This immediately raises the question of how to define a stock picker’s market, and how to determine whether today’s conditions are more auspicious for…
In the past few years a number of indices have been launched with a goal of minimizing the impact of contango. The first indices launched with this goal were the simple (1-5 month) forward indices and the relatively static S&P GSCI Enhanced. In the time period from Aug 2004-May 2011, mentioned in my prior post, these…
As mentioned in an article today in the Wall Street Journal, there may be a shift taking place in the commodities markets. In simple terms, there may be more predominant shortages of commodities. Generally as inventories are abundant, there are higher storage costs, which reduce returns from a condition called contango where the longer-dated contracts…
Today’s Wall Street Journal, among others, reported on a recent study by the Maryland Public Policy Institute arguing that the public pension funds which pay the highest fees haven’t reaped the highest investment returns. In fact, the study shows, it’s just the opposite — for the 5 years ended June 2012, the 10 states which…
The Wall Street Journal recently urged its readers to “Beware of Index Funds That Aren’t” (http://on.wsj.com/Xycv7P). If some soi-disant index funds “aren’t,” which ones “are” — or, at the most basic level, what is an index? A good working definition of an index is this: an index is a portfolio in which constituent and weighting…
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