Independence Day ETF Homeage To Homeland Security

July 04, 2008

by Tom Lydon

Among the usual things that we’ve come to associate with this day, exchange traded funds (ETFs) focused on homeland security and aerospace and defense also come to mind.

Independence Day is a national holiday that celebrates the United States, and it is a day to remember the nation’s laws, heritage, history and society. During turbulent political times and international relations, our patriotism is important and our diligence to homeland security is crucial to keep what we treasure about our country safe.

FocusShares ISE-CCM Homeland Security (MYP ) is a great path for an investor who wants to capture the performance of companies engaged in contractual work with the Department of Homeland Security. It holds 31.1% software, 17.5% health care, and 17% industrial materials. Year-to-date, it’s down 3.8%.

PowerShares Aerospace and Defense (PPA ) is another way to capture the homeland security angles. Industrial materials are 78.7% of the fund, which is down 17.4% year-to-date.

The Fourth of July is the celebration of our freedom from Great Britain, declared on July 4, 1776. We should not take our freedom for granted, as it is threatened every day.

While you watch those fireworks, remember what they symbolize for yourself and the next generation.

Job Cuts and Bad News Bring Tear to Some ETFs’ Eyes

July 02, 2008

by Tom Lydon

A grim employment report showed evidence of pressure being felt across various sectors and their exchange traded funds (ETFs).

U.S. private employers cut 79,000 jobs last month, and planned layoffs in the United States were up almost 50% from one year ago, reports Reuters. The job cuts were the largest decline since November 2002. A more comprehensive jobs report is due tomorrow, and few are expecting good news.

And while mortgage applications rose last week because of lower home loan rates, late payments on home equity loans were at 21-year highs.

In better news, factory orders rose an unexpected 0.6%, based on increased demand for aircraft. However, the numbers were still the weakest performance seen in three months.

When will the job hemorrhaging stop? Some economists think these troubles will be stubborn and that a shrinking labor market could last into the fall of 2009, reports Peter S. Goodman for the New York Times .

Real estate and homebuilder ETFs were down today, including:

• DJ Wilshire REIT (RWR ). down 4.4% year-to-date
• First Trust S&P REIT (FRI ). down 4.5% year-to-date
• iShares Dow Jones US Home Construction (ITB ). down 18.5% year-to-date

Boeing, Durable Goods Ground Transportation, Aerospace ETFs

June 25, 2008

by Tom Lydon

A double whammy of bad news took the aerospace and defense exchange traded fund (ETF) lower today.

First, orders for durable goods (those items meant to last three years or more) were stagnant last month. Metals, machinery and autos were among the items that felt slowing demand in May, reports Bob Willis for Bloomberg.

It was, however, the flat reading that economists were expecting. Any strength in May came from a 10.3% jump in demand for commercial aircraft and a 14.9% increase in orders for military planes and parts, reports Martin Crutsinger for the Associated Press.

The transportation ETF, iShares Dow Jones US Transportation (IYT ). got a slight lift thanks to the orders in planes offsetting weakness in auto sales.

Second, Boeing (BA ) shares fell to a 30-month low after Goldman Sachs downgraded its shares to sell. The analyst cited high oil prices and the slowing economy in his rating, reports the Seattle Times. Boeing is 7.7% of the PowerShares Aerospace & Defense (PPA ) .

IYT is up 10.3% year-to-date, while PPA is down 13.1%.

For full disclosure, some of Tom Lydon’s clients own shares of IYT.