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Monday, August 12, 2013
STOCKS TUMBLE AS YEN SURGES: Here's What You Need To Know
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BOND FUND CARNAGE: Investors Stage An Exodus From Emerging Markets As Equities Suffer Collateral Damage
It was another insane week for asset managers.
After huge redemptions from bond funds last week – during which investors pulled the most money in a single week from Treasury funds ever – the onslaught of outflows continues.
In the week ended June 12, bond funds as a whole saw $14.5 billion in redemptions, the second-largest weekly outflow from the asset class ever – for the second straight week in a row.
BofA Merrill Lynch Chief Investment Strategist Michael Hartnett calls it "bond fund carnage," writing in a note to clients that a "record $27 billion in 2 weeks shows complete washout in fixed income."
Hartnett also flags an "exodus from [emerging markets] assets" – emerging market debt and equity funds saw $9 billion in redemptions, the third largest weekly outflow on record – and calls the $9 billion of redemptions across global equity funds this week "collateral damage ... on big 'risk-off' trade."
Flows by Asset Class
Bonds: $14.5bn outflows (second largest on record for second straight week)
Equities: $8.5bn outflows (largest in 9 months) ($4.6bn via ETFs)
Commodities: $0.4bn outflows (18 straight weeks = longest on record)
Flows by Fixed Income Sector
$6.5 outflows from HY bond funds (2nd largest ever)
$2.5 outflows from EM debt (2nd largest ever)
$1.5bn outflows from govt/tsy funds
$1.7bn outflows from munis (largest in 2013)
51 straight weeks into floating-rate debt ($1.5bn)
Flows by Equity Region
$6.4bn outflows from EM equity funds (largest since Aug'11)
Our EM Flow Trading Rule will give a contrarian "buy" signal if we see another $8-10bn outflows next week or $11-12bn over nxt 2 weeks. Current 4w outflows = 1.9% of AUM ("buy" threshold is 3.0%)
Record outflows from real estate funds ($2.0bn) (but outflows dominated by IFGL and IYR ETF's)
Small inflows to Europe ($0.2bn) and Japan ($0.3bn)
The chart below shows that there may be scope for further outflows from emerging market assets in the coming weeks, which would trigger the first contrarian "buy" signal in BofA's emerging markets flow trading model in over two years.
BofA Merrill Lynch Global Investment Strategy, EPFR GlobalCHART OF THE DAY: The Mortgage Refinancing Boom Is Evaporating Before Our Eyes
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MISS: US INDUSTRIAL PRODUCTION FLAT IN MAY
May U.S. industrial production data are out.
Industrial production was flat in May after contracting a revised-up 0.4% in April.
Economists were looking for a 0.2% rise.
Manufacturing production posted a 0.1% rise in May, in line with expectations, after declining 0.4% the month before.
Capacity utilization fell to 77.6% from 77.7% last month. Economists predicted 77.8%.
Below is the full text from the release:
The production of consumer goods edged down 0.1 percent in May after having declined 0.7 percent in April; the index in May was 1.2 percent higher than its level of a year earlier. The production of durable consumer goods moved up 0.2 percent in May, and the output of nondurables slid 0.1 percent. Among consumer durables, the indexes for automotive products; home electronics; and appliances, furniture, and carpeting moved up, while the index for miscellaneous goods decreased. The production of non-energy nondurables edged down 0.1 percent; losses in the indexes for foods and tobacco and for paper products outweighed gains in the production of clothing and of chemical products. After having fallen 3.1 percent in April, the output of consumer energy products declined 0.2 percent further in May; a decrease in sales by utilities to residences more than offset an increase in the production of fuels.
After having declined 0.3 percent in April, the output of business equipment edged up 0.2 percent in May and was 3.3 percent above its year-earlier level. The index for transit equipment increased 0.5 percent in May, primarily as a result of an increase in the production of medium and heavy trucks, and the index for information processing equipment rose 1.2 percent, with the gain concentrated in the output of electrical instruments. Widespread declines among the components of industrial and other equipment resulted in a decrease of 0.3 percent for that market group.
The output of defense and space equipment decreased 0.7 percent in May; the index last posted a gain in December 2012.
Among nonindustrial supplies, the production of construction supplies moved down 0.2 percent in May following decreases of 1.2 percent in both March and April; output in May was 2.6 percent above its level of a year earlier. After having fallen 0.9 percent in April, the production of business supplies declined 0.3 percent in May and stood 0.7 percent below its year-earlier level.
The production of materials to be processed further in the industrial sector advanced 0.2 percent in May and was 2.1 percent above its level of a year earlier. All major components of materials posted gains in May. The output of durable materials edged up 0.1 percent, as increases in the indexes for consumer parts and equipment parts were nearly offset by a decline in the index for other durable materials. Following four months of losses, the production of nondurable materials increased 0.4 percent in May. Among its major subcategories, both textile materials and chemical materials recorded gains while paper materials was unchanged. The output of energy materials edged up 0.1 percent to post its fifth consecutive monthly increase.
Manufacturing output moved up 0.1 percent in May after having declined 0.3 percent in March and 0.4 percent in April. The index in May was 1.7 percent above its year-earlier level but was little changed, on net, since the turn of the year. The factory operating rate held steady in May at 75.8 percent, a rate 2.9 percentage points below its long-run average.
The output of durable goods advanced 0.2 percent in May and stood 2.9 percent above its year-earlier level. Among its major components, the largest gains were posted by wood products and by computer and electronic products, each of which increased 1.1 percent, and the largest losses were recorded in primary metals and in furniture and related products, each of which fell about 1 percent. Capacity utilization for durable goods manufacturing was unchanged at 75.9 percent, a rate 1.1 percentage points below its long-run average.
The production of nondurable goods edged up 0.1 percent in May after having declined in March and April. Among nondurables, the index for apparel and leather posted the largest gain, 3.1 percent, which partially offset its losses in the previous two months. The output of most of the other major components of nondurable manufacturing moved up in May; only the index for food, beverage, and tobacco products fell, and the index for paper was unchanged. Capacity utilization for nondurables held steady at 77.3 percent, a rate 3.4 percentage points below its long-run average.
Production for non-NAICS manufacturing industries (publishing and logging) decreased 0.4 percent in May for a sixth consecutive monthly decline; the index was 9.4 percent below its year-earlier level.
In May, production at mines advanced 0.7 percent following an increase of 1.1 percent in April. The gain in May reflected a large increase in coal mining. The operating rate for mining rose 0.3 percentage point to 88.2 percent, a rate 0.9 percentage point above its long-run average. The production index for electric and natural gas utilities decreased, and the operating rate for utilities declined 1.4 percentage points to 77.3 percent, a rate 8.9 percentage points below its long-run average.
Capacity utilization rates in May for industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.4 percentage point to 86.9 percent, a rate 0.6 percentage point above its long-run average; at the primary and semifinished stages, utilization declined 0.4 percentage point to 75.5 percent, a rate 5.5 percentage points below its long-run average; and at the finished stage, utilization edged down 0.1 percentage point to 75.8 percent, a rate 1.3 percentage points lower than its long-run average.
The Federal Reserve Board issued its annual revision to the index of industrial production (IP) and the related measures of capacity utilization on March 22, 2013. The revised IP indexes incorporated detailed data from the 2011 Annual Survey of Manufactures, conducted by the U.S. Census Bureau. Annual data from the U.S. Geological Survey regarding metallic and nonmetallic minerals (except fuels) for 2012 were also incorporated. The update included revisions to the monthly indicator and to seasonal factors for each industry. In addition, the estimation methods for some series have changed. Modifications to the methods for estimating the output of an industry affected the index from 1972 to the present.
Capacity and capacity utilization were revised to incorporate data through the fourth quarter of 2012 from the Census Bureau's Quarterly Survey of Plant Capacity, which covers manufacturing, along with new data on capacity from the U.S. Geological Survey, the Department of Energy, and other organizations.
The revision is available on the Board's website at www.federalreserve.gov/releases/G17.
Note. The statistics in this release cover output, capacity, and capacity utilization in the U.S. industrial sector, which is defined by the Federal Reserve to comprise manufacturing, mining, and electric and gas utilities. Mining is defined as all industries in sector 21 of the North American Industry Classification System (NAICS); electric and gas utilities are those in NAICS sectors 2211 and 2212. Manufacturing comprises NAICS manufacturing industries (sector 31-33) plus the logging industry and the newspaper, periodical, book, and directory publishing industries. Logging and publishing are classified elsewhere in NAICS (under agriculture and information respectively), but historically they were considered to be manufacturing and were included in the industrial sector under the Standard Industrial Classification (SIC) system. In December 2002 the Federal Reserve reclassified all its industrial output data from the SIC system to NAICS.
Click here for the full release >
Do the Drop-Down Dance With Spectra Energy
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JOB OF THE WEEK: Finance Director
This position resides with the Meredith Xcelerated Marketing’s (MXM) Los Angeles location and reports functionally to the VP, Finance MXM in Des Moines, Iowa, with a dotted line to SVP/GM/Chief Digital Officer in Los Angeles, CA. MXM’s Los Angeles campus leads MXM’s interactive marketing operation, specializing in online marketing communications. MXM is fully owned by Meredith Corporation which is headquartered in Des Moines, IA. MXM’s LA location builds sophisticated interactive/online marketing and communication programs for clients. This position oversees two finance staff in LA, and also has the support of a Des Moines based financial/business manager. The role leads all financial planning, analysis and decision support associated with the company’s service offerings. The Finance Director is viewed as a strategic business partner with the SVP/GM. Responsibilities also include overseeing timely and accurate monthly financial forecasts, monthly financial close process, and leading the annual budget process.
Key responsibilities include:
Key responsibilities include:
-Partner with the MXM’s VP Finance and MXM’s SVP/GM/Chief Digital Officer on analysis, creation of strategies, analysis of existing services, and general recommendation of financial and operational efficiency and improvement. This includes reviewing client profitability and analyzing employee utilization to provide recommendations for improvement.
-Builds and reviews in detail the financial models and supporting analysis (including new business pricing) of existing and future business services. Collaborate with sales, marketing, and administrative heads to develop, support, and implement financial and operational initiatives.
-Creates and oversee regular processes and reports such as monthly close process, accurate P&L forecasts and related items. This includes overseeing client billing, client and vendor contracts, revenue recognition and related compliance.
-General projects and oversight as assigned.
Minimum Qualifications:
All must be met to be considered.
Education:
Bachelor’s degree in Finance or relevant field, MBA and/or CPA is preferred, or equivalent training and/or experience.
Experience:
Ten years related work experience. Minimum four years experience in a service-based consulting firm, advertising agency or in a similar environment. Broad human resources and payroll background helpful.
Specific Knowledge, Skills and Abilities:
Proven leader and collaborative business partner.
High aptitude and enthusiasm for complex financial modeling and analysis.
Strong experience in MS Office Excel, Word and Powerpoint.
Strong capabilities for writing, facilitating and presenting analyses to executives/senior management.
Ability to think strategically.
Good organizational skills.
Ability to multi-task in a fast-paced environment and maintain composure under pressure.
Proactive self-starter who can work well independently and as part of a team.
Organized with a proven attention to detail.
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