Global fixed income with high yield.

ETF market is booming. On the other side the old kind of exchange traded mutual funds are loosing vogue. Currently you can find plenty of ETF specialty like global equity, sector's niche, currency ETF and also with fixed income. But the offer for fixed income ETF is quite limited. Mostly focused only on US government, corporate and municipal bonds. Investors looking for global exposure can choose among closed end funds. Except US and other major economies you can find also very exotic investment. I've listed below the highest yielding CEF. Majority of them are keeping bonds from emerging markets like Brazil, Russia, Turkey, Mexico, Eastern Europe. High yield is compensated by lower rating than US bonds are having.

Ticker	Name	Sponsor	Yield
(FHO)	First Trust Strategic High Income Fund	First Trust Advisors LP	16.36%
(HYF)	Managed High Yield Plus Fund, Inc.	UBS Global Asset Management	13.11%
(MGB)	Morgan Stanley Global Opportunity Bond Fund	Morgan Stanley Institutional	12.85%
(HNW)	Pioneer Diversified High Income Trust	Pioneer Investments	11.49%
(PHT)	Pioneer High Income Trust	Pioneer Investments	11.11%
(HIX)	Western Asset High Income Fund	Legg Mason	10.37%
(JGT)	Nuveen Multi-Currency Short-Term Government	Nuveen Investments	10.33%
(EMD)	Western Asset Emerging Markets Income Fund	Legg Mason	9.52%
(MIN)	MFS Intermediate Income Trust	MFS	9.43%
(JGG)	Nuveen Global Government Enhanced Income Fund	Nuveen Investments	9.26%
(ESD)	Western Asset Emerging Markets Debt Fund	Legg Mason	9.22%
(KST)	DWS Strategic Income Fund	DWS Scudder	9.19%
(FAM)	First Trust/Aberdeen Global Opportunity	First Trust Advisors LP	9.08%
(KMM)	DWS Multi-Market Income Trust	DWS Scudder	9.01%

New blue chip coming to stock exchange.

On February next company will enter the most liquid segment of Prague Stock Exchange. Vienna Insurance Group is the first insurance and third financial company listed on Czech stock market. This Austrian group owns in Czech Republic two insurance companies, Kooperativa and Ceska podnikatelska pojistovna. First trading day is scheduled on 5th of February.

Currently the most liquid segment SPAD contains 12 blue chip stocks. And main Czech index PX 50 is almost by half weighted only by two large caps; CEZ and Erste Bank.

Business Week. Yahoo and Pepsi.

Monday
Economic: New Home Sales (645K)
Earnings: Black & Decker (BDK), Corning (GLW), Halliburton (HAL), McDonalds (MCD), Verizon (VZ), Airgas (ARG), American Express (AXP), Cemex (CX), SanDisk (SNDK), VMware (VMW)

Tuesday
Economic: Durable Orders (2.0%), Consumer Confidence (87)
Earnings: 3M (MMM), Burlington (BNI), Cardinal (CAH), Dow (DOW), EMC (EMC), Peabody (BTU), Smith (SII), Pepsi (PBG), Valero (VLO), Chubb (CB), Cymer (CYMI), Yahoo (YHOO)

Wednesday
Economic: ADP Survey, GDP / Chain Deflator Adv (1.2%, 2.6%), FOMC Decision
Earnings: Altria (MO), Kodak (EK), Illinois Tool (ITW), Legg Mason (LM), SAP (SAP), Southern (SO), Amazon (AMZN), Evergreen Solar (ESLR), Novellus (NVLS), Starbucks (SBUX)

Thursday
Economic: Weekly Claims (315K), Crude Inv, Employ Cost Index (.8%), Inc & Spend (.4%, .1%), Core PCE (.2%), Chicago PMI (53)
Earnings: Alliant (ATK), Blue Phoenix (BPHX), Celgene (CELG), Cameron (CAM), Invest Tech (ITG), L-3 (LLL), MasterCard (MA), Procter & Gamble (PG), Under Armour (UA), Dolby (DLB), Digital River (DRIV), E’ Arts (ERTS), In-Surgical (ISRG), Massey (MEE), Monster (MNST)

Friday
Economic: Jobs Data (55K, 5.0%, .3%), Auto / Truck (5.2M, 7.2M), Construction (-.5%), ISM (47.5), Michigan (79)
Earnings: Arch Coal (ACI), Chevron (CVX), Exxon (XOM), NYMEX (NMX), Oshkosh (OSK), Tidewater (TDW), Ryder (R)

New Skoda Superb revealed.

Last week magazine Motor Authority discovered first pictures of new Skoda Superb. The car is expected to be available on sale in summer 2008. Production start is planned for March 2008. Factory will still produce both models as there is still strong demand for first version of Superb. Czech car producer Skoda Auto is also one of potential IPO on Prague Stock Exchange for year 2008. Company is part of Volkswagen holding (VLKAY).

Blood on the street.

Major stock market benchmark Europe's Stoxx 600 index declined 20% since its 6 and half year high on June 1. This is clear definition of beginning of bear market. European shares entered bear market first time since 2003 due to fear that losses from financial sector and economic recession in US will halt profit growth in Europe. Even though ECB declared that will not follow FED interest rate decision many analysts are now expecting two rates cut within 2008 in Euro zone. Today in Europe we see blood on the street. Look at main stocks benchmark.Main laggard DAX30 touched -7%, CAC40 -5%, FTSE 100 -5%. Emerging markets in Europe don't look better as well. New statistics are coming every day. Last week was the worst in 5 years. FTSE 100faces the worst start to year since 1935. It is hard to say what could ease current drop and shaped at least short term bottom. Friday's trading in US showed us that not even good earnings results from IBM (IBM) and General Electric (GE) were able to stop selling. FED rate decision meeting is on 30. January.

Tech Business Week. Nokia and Motorola.

Tuesday
Economic: NA
Earnings: BofA (BAC), CSX (CSX), DuPont (DD), J & J (JNJ), Suncor (SU), Waters (WAT), Apple (AAPL), Cree (CREE), HOKU (HOKU), Texas Instruments (TXN)

Wednesday
Economic: NA
Earnings: Air Products (APD), Alleghany (ATI), Coach (COH), Conoco (COP), Motorola (MOT), Pfizer F5 (FFIV), Gilead (GILD), Hexcel (HXL), QLogic (QLGC), Qualcomm (QCOM), Stryker (SYK), Western Digi (WDC)

Thursday
Economic: Weekly Claims (325K) Weekly Crude, Existing Homes (4.95M)
Earnings: AT&T (T), Avnet (AVT), Amerisource (ABC), Cypress (CY), Ford (F), Danaher (DHR), Imclone (IMCL), Lennar (LEN), Nokia (NOK), Potash (POT), SunPower (SPWR), Amgen (AMGN), Broadcom (BRCM), KLA-Tencor (KLAC), Juniper (JNPR), MEMC (WFR), Microsoft (MSFT), Tempur-Pedic (TPX), Technitrol (TNL), Varian Semi (VSEA)

Friday
Economic: NA
Earnings: Caterpillar (CAT), Fortune Brands (FO), Harley (HOG), Weatherford (WFT)

Hedging strategy for weak USD.

Last week General Electric (GE) released good results which met expectations. Infrastructure business unit grew its profit by 26% in forth quarter. This segment makes up 40% of GE total earnings.More than 50 percent of GE revenues now coming from outside the U.S.
Still strong global demand and weak USD are major factors which are helping US companies with international focus. The question is if this is already reflected in stock prices. But investment to exporters and multinationals is still smart play.

Hewlett-Packard (HPQ) is getting amazing 70% of revenues from abroad. Also among mid size cap we can find companies with international exposure more that 50%. For example NCR (NCR) which with revenue rise 12% in last quarter. As they announced one quarter came from favourable USD depreciation. Company is leader in automatic teller machines and this unit contributed by 17% mainly due to strong demand coming from Asia and Europe.
Another interesting mid size caps with foreign revenues more than 50%:

Ametek (AME)
Becton Dickinson (BDX)
Manitowoc (MTW)
Sigma-Aldrich (SIAL)
Tenneco (TEN)
Timberland (TBL)

Go short with inverse / leveraged ETF.

Many traders are forecasting beginning of bear market. If you are not focused on specific companies and you are bearish with some industry or with some world stock market index you can try inverse ETF. I've tried to list all of them. Some are even leveraged ETF (with double inverse performance against index which is followed).


ETF Name (Ticker)

Short QQQ (PSQ)
Short Dow 30 (DOG)
Short S&P 500 (SH)
Short MidCap400 (MYY)
Short SmallCap600 (SBB)
Short Russell2000 (RWM)
UltraShort QQQ (QID)
UltraShort Dow 30 (DXD)
UltraShort S&P 500 (SDS)
UltraShort MidCap400 (MZZ)
UltraShort SmallCap600 (SDD)
UltraShort Russell2000 (TWM)

Short international :

Short MSCI Emerging Markets (EUM)
Short MSCI EAFE (EFZ)
UltraShort MSCI EAFE (EFU)
UltraShort MSCI Emerging Markets (EEV)
UltraShort MSCI Japan (EWV)
UltraShort FTSE/Xinhua China 25 (FXP)

UltraShort Style:

UltraShort Russell1000 Value (SJF)
UltraShort Russell1000 Growth (SFK)
UltraShort Russell MidCap Value (SJL)
UltraShort Russell MidCap Growth (SDK)
UltraShort Russell2000 Value (SJH)
UltraShort Russell2000 Growth (SKK)

UltraShort Sector:

UltraShort Basic Materials (SMN)
UltraShort Consumer Goods (SZK)
UltraShort Consumer Services (SCC)
UltraShort Financials (SKF)
UltraShort Health Care (RXD)
UltraShort Industrials (SIJ)
UltraShort Real Estate (SRS)
UltraShort Semiconductors (SSG)
UltraShort Oil & Gas (DUG)
UltraShort Technology (REW)
UltraShort Utilities (SDP)

US markets extend losses.

Not even today's Bernanke's and Bush's call for stimulus package are helping markets stop losses. Broad indices are approaching bottoms created on March 2007 after China sell-off. Technical chart shows us that Nasdaq Composite is really close to that bottom which is on 2331 points. Negative sentiment is fuelled after Merrill Lynch (MER) revealed write down by almost 10 billion USD. Only during last year shares lost 42%. Let's see FED action during next meeting which takes place on 30. January or maybe earlier if there is emergency meeting. My expectation is 50 bp cut.

Lately we are hearing many statistics which are beaten. Let me add that now it is forth consecutive week when markets are in red. Last time it happened on April 2005 but drop was much lower.

Financial Business Week.

Monday
Economic: NA
Earnings: FCStone (FCSX), M&T Bank (MTB)

Tuesday
Economic: Retail Sales (.1%, .1%), PPI & Core (.2%, .2%), Empire (10.0), Biz’ Inv’s (.4%)
Earnings: Citigroup (C), State Street (STT), US Banc (USB), New Oriental Ed’ (EDU), Intel (INTC)

Wednesday
Economic: CPI & Core (.2%, .2%), IP & CU (-.1%, 81.3%), Fed’s Beige Book
Earnings: AMR (AMR), JP Morgan (JPM), Progressive (PGR), Wells Fargo (WFC), Logitech (LOGI), Rambus (RMBS)

Thursday
Economic: Weekly Claims (335K) Weekly Crude, Housing Starts & Permits (1.15M, 1.14M), Philly Fed (-1.5)
Earnings: Amphenol (APH), Bank of NY (BK), BlackRock (BLK), Merrill Lynch (MER), CIT Group (CIT), Briggs & Stratton (BGG), IBM (IBM), Seagate (STX), WaMu (WM), Wipro (WIT)

Friday
Economic: Leading Indicators (-.1%), Michigan (74.5)
Earnings: Amcol (ACO), General Electric (GE), Johnson Controls (JCI), Schlumberger (SLB)

Interest rates prediction.

In 2007 many central banks have started expansionary monetary policy. At the picture you can see current level for interest rate. But currency traders have to go beyond interest rate differentials.Therefore on second picture is expectation or outlook. I'd like to mention also that in countries of Central and Eastern Europe there are still expectations for contractionary policy or unchanged rates rather than lowering. Nowadays there are many Exchange traded funds underlying currency pair. This is the latest offer on AMEX.

CurrencyShares Australian Dollar Trust ETF (FXA)

CurrencyShares British Pound Sterling Trust ETF (FXB)

CurrencyShares Canadian Dollar Trust ETF (FXC)

CurrencyShares Euro Trust ETF (FXE)

CurrencyShares Japanese Yen Trust ETF (FXY)

CurrencyShares Mexican Peso Trust ETF (FXM)

CurrencyShares Swedish Krona Trust ETF (FXS)

CurrencyShares Swiss Franc Trust ETF (FXF)

PowerShares DB G10 Currency Harvest Fund (DBV)

PowerShares DB US Dollar Index Bearish Fund (UDN)

PowerShares DB US Dollar Index Bullish Fund (UUP)

Business and Financial blog network with Forbes.

During this Christmas I got invitation to join Business and Financial blog network. Forbes is going to launch this project sometime on January 08. I welcome this offer and for sure I will join this network.

There is a requirement to keep at least 2 ads banner provided by Forbes. This community could be very promising as Forbes gets monthly 20 millions unique visitors. Blogging section should look like this.

CEE emerging markets under selling pressure.

Emerging markets in New Europe were very bearish today. Polish WIG 20 closed -2.4%, Czech PX 50 -2.5% and Hungarian BUX -1.2%. During day PX 50 was down even more than 4%. Present P/E valuation is 13.2. But still Czech economy is growing more than Western Europe and also above average in enlarged Europe. There is a risk of strong currency. Czech Koruna is the strongest in region. But heavily weighed holdings (CEZ, Erste Bank, O2) in index PX 50 shouldn't be negatively affected by currency appreciation.

Exposure from Central and Eastern European stock markets offers ETF SPDR S&P Emerging Europe (GUR) which has more that half holdings in Russia and the rest is splitted among Poland, Turkey, Czech Republic and Hungary.

US stocks back in green.

Today we can see session again with high volatility. In contrast to previous days today it looks more in favour of bulls. If you look at the chart Nasdaq bottomed with similar candlestick as on August. If this is really short-term bottom we will see in following days. I think important is awaited earnings kick off which coming to the street today. After closing bell Alcoa (AA) releases earnings result.

Major broad US indices are significantly off their October's high. Dow Jones Industrial ($INDU) and S&P500 ($SPX) roughly 12% and Nasdaq ($COMP) is down 15%.

Defensive stocks from Switzerland.

Yesterday I mentioned my investing strategy for current volatile market, putting money to defensive dividend stocks.And those companies are today's winners. GlaxoSmithKline (GSK) was leading gains in London with +3.5%. Swiss market index SMI closed negative nevertheless large pharmaceutical and food caps were still attractive. Nestle (NESN.VX) +2.19%,Roche (ROG.VX) +1.11% and Novartis (NVS) +1.15%. Investment in Swiss market can be wise choice. Economy seems headed for its forth straight year of above trend growth. GDP for 2007 2.5% and outlook for 2008 is 2%. Risks for price stability remain on upside. In context of lowering rates in US and Euro zone Swiss Franc should strengthen against both major currencies. This will bring you additional value for your investment. Franc is not seen as a funding currency for carry trades as it was in past. Switzerland continues to retain status as a safe heaven in recent sub prime mortgage crisis.

There are two ETF on AMEX. iShares MSCI Switzerland Index (EWL) underlying mostly 3 caps I was writing above. And second is CurrencyShares Swiss Franc Trust (FXF).

Business Week. Earnings kick off.

Monday
Economic: NA
Earnings: Schnitzer (SCHN), Immucor (BLUD)

Tuesday
Economic: Pending Home Sales (-.5%)
Earnings: Acuity (AYI), Constellation Brands (STZ), KB Home (KBH), RPM (RPM), Oxford (OXM), Xyratex (XRTX), Apollo (APOL)

Wednesday
Economic: NA
Earnings: Mosaic (MOS), Alcoa (AA)

Thursday
Economic: Weekly Claims (345K), Weekly Crude, “BernankeSpeak”
Earnings: M&T Bank (MTB), MGIC Investment (MTG), IHS (IHS), Shuffle Master (SHFL), Synnex (SNX)

Friday
Economic: Import Prices (.2%), Trade Balance (-$59.5B)
Earnings: Infosys (INFY)

High quality dividend stocks.

Dividend stocks shouldn't miss in your portfolio for 2008. If you run stock screening for large cap (over $5 bil. market cap) with low P/Evaluation you get mostly financial companies. Dividend yields are tempting but I'd stay away. Those are with high probability for dividend payment cuts. Other sectors with juicy dividends are telecommunications, food & beverages and health care. Especially last one is good pick in current turmoil as health care is very defensive. List below contains large caps with low valuations and coming from "safe" sectors.
General Electric keeps steady growth exceeding 10%. General Mills is stock with very low volatility and could be seen as a safe pier.Kimberly Clark is spreading the wealth around to shareholders. 2007 buybacks hit $2.8 billion. And Anheuser-Bush raised prices to cover higher costs for commodities.

Company	P/E	Dividend yield
GlaxoSmithKline (GSK)	13.4	4.2
AstraZeneca (AZN)	10.9	4.1
Telecom Italia (TI)	16	4
General Electric (GE)	16.8	3.4
General Mills (GIS)	16.8	2.8
Merck (MRK)	23.1	2.7
Kimberly Clark (KMB)	16.9	3.1
Anheuser-Busch (BUD)	18.9	2.5

Outlook for global stock markets.

Welcome to year 2008. I just came back from my oversea holiday. Let me wish you successful year 2008.

Year 2007 was quite nervous with high volatility especially at the end of the year. Credit market turmoils spread over. Also fear of US economy recession has pushed stocks lower. How to invest in coming year? I still like stocks but it's needed to be more selective than in last years as major stock markets indices will hardly beat past performances. During this month I'll publish some stocks which I will be adding to my portfolio.

For 2008 I don't expect US economy goes to recession. Consumer spending remained positive on year-to-year basis for 2007. And as labour market remains strong US consumers will keep higher spending. Plus global growth and weak US dollar are stimulating export. If we look at to US stock markets. Shares are with the cheapest valuation in this decade (P/E ratio for S&P500 is 18). I expect beginning of 2008 with continuing volatility but I see optimistic second half of the year as effects of interest rate cuts will be implied. Moreover there could be fiscal stimulus too, if White House tries to amp up growth ahead of the 2008 Presidential election. Index S&P500 has risen in the final seven months of every election year since 1950 except one.