Tag Archive | COW

Three ETFs Impacted By US-South Korea Trade Agreement

The United States and South Korea agreed to modify a free-trade agreement, which, upon execution, will be the largest value of trade volume in the world since the North American Free Trade Agreement (NAFTA) paving the path to opportunity for the iShares MSCI South Korea Index (EWY), the Consumer Discretionary Select Sector SPDR (XLY) and the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (COW).

More specifically, the amendments to the trade agreement includes new steps to open up South Korea’s auto market to US producers by enabling 25,000 vehicles to enter South Korea based on US safety standards.   Furthermore, the United States is allowed to keep a 2.5% tariff on Korean-built cars for five more years, which will eventually be cut, and a 25 percent tariff on trucks until the eight year and eliminate the duty in the tenth year of the pact.    Read More…

Beef Shortage Could Boost Agriculture ETFs

As the global appetite for cattle widens and supplies in the US begin diminishing, a supply and demand imbalance could potentially push cattle prices through the roof enabling exchange traded funds like the PowerShares DB Agricultural Fund (DBA), the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (COW) and the UBS E-TRACS CMCI Livestock TR ETN (UBC) to reap the benefits. 

Demand from around the world for cattle is increasing as wealth, purchasing power and widening of a middle class in developing nations increases and desires for a Western way of life prevail.  According to data from the US Department of Agriculture (USDA), export volume of US beef rose by 26 percent year-over-year through May of this year, with an overwhelming spike in demand coming from Asia.  The report indicates that exports to Hong Kong rose by 126 percent, to South Korea by 74 percent and to Taiwan by 54 percent.  Additionally, demand from other emerging and frontier markets is strong, illustrated by a 3,628 percent increase in exports to Russia and a 234 percent increase to Egypt.  As a result of this improved demand, the US, which is the largest beef producer in the world, is expected to ship more than 2 billion pounds of beef and veal overseas this year for the first time in nearly 7 years. Read More…

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