The wild week on Wall Street concluded on Friday with major losses for most U.S. and international benchmarks. This was largely due to a 2.9 point drop in the U.S. Consumer Sentiment Index, as well as a 0.5% personal spending drop in September. Both of these issues, along with higher retail gas prices (which have climbed over 16% in the last two months), gave investors a pre-Halloween scare that sent indexes tumbling. The ETFdb 60 Index, a broad-based measure of the performance of asset classes available through exchange-traded funds, dropped 16.40, or 1.6%, to close the month at 979.78. The ETFdb 60 Index lost 2.0% during October.
In a complete reversal of yesterday, iShares MSCI Brazil Index Fund (EWZ), fell by more than 4.5% following news that Brazil’s September budget deficit widened to a 9 month high of $13 billion. The deficit, which includes the federal government, local governments, and state companies, rose to about 22.4 billion reals from 8.2 billion reals. Analysts had been expecting the deficit to widen to about 12 billion reals, so the news indicated that government spending has surged as tax revenues have declined sharply.
Also leading the decliners was the iShares MSCI Emerging Index Fund (EEM), which fell more than 4.5%, as investors fled emerging markets and pushed their assets towards safe havens.
Volatility ETNs continued to move in opposite direction of the equity markets, with iPath S&P 500 VIX Short-Term Futures ETN (VXX) being one of the few bright spots in the ETFdb 60. The note finished up over 10% today on volume of nearly 3 million shares, more than three times the daily average.
Disclosure: No positions at time of writing.