Coming off the best weekly performance in several months, equity markets were unable to keep their momentum on Monday, as many indexes lost ground late in the day to finish in the red. Europe once again dominated the headlines, although not all the news from across the pond was bad. Moody’s cut Greece’s debt by four notches, moving it into junk status. The move seemed to be largely priced in by markets though, as bullish data reports were sufficient to offset the downgrade. The euro climbed higher against major rivals on news that factory output rose 9.5% in April from a year earlier, the best showing in more than two decades. Back in the U.S., the financial sector was once again in focus as the latest twist on reform emerged from Washington; the Financial SPDR (XLF) shed 0.4% on the day.
The ETFdb 60 Index, a benchmark measuring the performance of all asset classes available through ETFs, climbed 1.77 points, or 0.2%, on Monday, boosted by international equities and commodity products.
The biggest winner on the day was the United States Natural Gas Fund (UNG), which surged 4.7% to start the week. UNG’s Monday rally came after more forecasts for a hot summer, a development that would increase air conditioner usage and drive up demand for natural gas. Moreover, technical buying further boosted share prices on Monday, with the fund triggering several bullish indicators.
Natural gas prices have surged in recent weeks as a wave of statistical releases have painted a relatively rosy picture for the U.S. economy; factory activity is finally beginning to pick up after years of hibernation. While stock markets have been held in check by anxiety over pockets of weakness in the global economy, natural gas–a local commodity that depends exclusively on U.S. demand–has surged (see UNG’s Rally: Proof Of A U.S. Recovery).
Among the day’s biggest losers was the Gold Miners ETF (GDX), which dropped 1.8% as gold prices retreated and investors took gains in one of the few equity funds that has benefited from the recent turmoil in markets. GDX tracks the NYSE Arca Gold Miners Index, a benchmark comprised of global companies primarily engaged in mining for gold. Even after Monday’s slide, GDX is still up about 8% on the year, a result of the run-up in gold prices to record levels as investors have sought out safe haven investments (see Five Safe Haven ETFs).
Disclosure: No positions at time of writing.