The Markets July 26, 2010

FedEx Ships Back Rest of 401(k) Match

With earnings per share for its fiscal first quarter expected to be up between 81% and 116%, the FedEx Corporation announced Monday it would fully restore its 401(k) match effective January 1, 2011. 
Reported by

A FedEx news release said the cost of restoring its match for its 401(k) plans had already been figured into its guidance to investors that it expected EPS of $1.05 to $1.25 per diluted share for the quarter ending August 31. 

The shipping giant said its rosy investment predictions reflected “the current market outlook for fuel prices and a continued moderate recovery in the global economy.” 

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“Our revenue and earnings growth are exceeding original expectations, primarily due to better-than-expected growth in FedEx Express and FedEx Ground volumes,” said Alan B. Graf Jr., FedEx Corp. executive vice president and chief financial officer, in the announcement. “Our package volume growth rates in our first quarter are continuing at a pace similar to our fourth quarter.” 

 The company announced last December that it was putting back in place half of its former match as well as its merit salary increases and bonus programs (see FedEx Puts Back Part of 401(k) Match). 

Products July 26, 2010

Bank of America Merrill Lynch Offers ETF-Specific Algorithm

Bank of America Merrill Lynch has unveiled its premium algorithm, ETF-aX.
Reported by

This new ETF-specific algorithm analyzes market depth and price data across an ETF’s underlying portfolio to identify the most efficient combination of ETF, stock, and futures and then automatically trades them to source liquidity and find the best prices, according to a press release.  

Upon receiving a client’s order to trade an ETF, the engine analyzes inside pricing and depth of book across the ETF, stock, and futures markets to compile a picture of available liquidity. Once ETF-aX determines the optimal way to transact, balancing a desire for the best pricing against a need to capture the most liquidity, slices are simultaneously sent out to all market centers. A composite ETF price is assembled from the different executions and provided to clients.  

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“The primary challenge with trading ETFs is market fragmentation; liquidity is limited outside of the top-ranked ETFs,” said Charlie Whitlock, an execution consultant at BofA Merrill, in the announcement. “By using ETF-aX, clients are able to leverage our in-house ability to trade a combination of the component parts in different markets, gaining liquidity at more efficient pricing.”

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