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A sampling of research & data on ETFs from AltaVista Research
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Coverage at a glance
No. of ETFs
538

Total Mkt Cap ($bns)

$573.7

Avg. daily value traded ($bns)

$54.8
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July 26, 2010
Greetings!

Below please find the ETF Spotlight newsletter for the week of July 26, containing highlights of the research and data on www.etfresearchcenter.com as well as a recap of the past week's action in the ETF market. 

The focus of this week's edition is sales growth, which is once again a concern on Wall Street as a number of prominent companies reported disappointing top-line results for Q2. Feel free to share it with others who may be interested. 
 
In this week's issue

technicianSales growth by sector
  • Chart of the week: Q2 2010 Sales growth by sector
  • Fund Focus: Consumer Discretionary Select Sector SPDR (XLY)
  • Revisions, asset flows & short interest
  • Sales estimates, growth rates and P/S multiples for major ETFs
  • Market monitor - movers & categories
To download the full newsletter click here.
 
Chart of the week
Sales growth by sector
Q2 Sales growth by sector.
sales_growth

With about 35% of S&P500 (SPY) firms having reported Q2 2010 results, it appears as if overall sales will be up about 10.6% year-on-year. However, stripping out sales from the commodity price-driven Energy (XLE) and Materials (XLB) sectors, sales would only be up about 7.1%. Decent, but hardly impressive coming out of such a deep recession.

This week's chart shows both the increase in sales by sector and the contribution of each sector to overall index sales growth. Indeed, Energy (XLE) is by far the largest contributor. with an estimated $79 billion increase in sales. Meanwhile the Financial sector (XLF)--the biggest contributor to index earnings growth in Q2--is actually detracting from the top line, as trading revenue dried up and the yield curve flattened during the quarter.

Cyclical sectors such as Consumer Discretionary (XLY) and Industrals (XLI) aren't posting particularly impressive sales growth; XLY is the subject of this week's Fund Focus. However one sector that stands out is Technology (XLK), which in the ETF includes Telecom stocks. Sales growth for XLK is the second largest contributor to index sales growth at about $40 billion, a 16% increase over last year. Stripping out Telecom the growth rate would be an impressive 21.7%.

To download the full newsletter, click here.
 
Fund Focus
Consumer Discretionary Select Sector SPDR (XLY)shopping

Estimates had been rising nicely but have recently stalled. In any case, expectations for this year and next, which imply record levels of profitability for both margins and return on equity, appear overly optimistic given persistent unemployment and the shift by consumers away from debt in favor of saving; witness the anemic sales growth coming out of such a deep recession. Meanwhile with its rich valuation multiples XLY continues to have the lowest ALTAR Score of any Sector SPDR.

To download the full newsletter, click here.
 
As always your questions & feedback are most welcome.
 
Sincerely,
 
Michael Krause
AltaVista Research