Everywhere investors looked on Monday, storm clouds were gathering. Several European governments outlined plans for deep austerity measures, warning that the fiscal health of many major economies was in serious jeopardy. And in the U.S., which had largely been seen as a safe haven during the tumultuous times overseas, data releases from the Federal Reserve revealed some disconcerting trends. Investors cheered reports that consumer borrowing rose in April, but a major downward revision to March numbers was cause for concern. Elsewhere, Steve Jobs made the highly-anticipated introduction of the new iPhone, while a financial crisis commission reported that it had issued a subpoena to Goldman Sachs in connection with the ongoing fraud investigation.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, slid 6.41 points, or 0.6%, on the day. Losers outnumbered winners by nearly three-to-one in heavy trading to start the week.
The biggest loser was the iShares Dow Jones Transportation Index Fund (IYT), which dropped 2.9%. A big drop in top holding FedEx, which announced it was hiking its quarterly dividend only one penny, weighted on IYT on Monday, as did the overall gloomy sentiment on Wall Street. IYT tracks the Dow Jones Transportation Index, a benchmark made up of railroad operators, freight companies, and delivery stocks.
Among the beneficiaries of Monday’s chaos was the Market Vectors Gold Miners ETF (GDX), which added 2.8% on the day. A rush to safe haven investments sent gold prices higher–GLD added 1.9% on the day–and drove up the prices of gold mining stocks in the process. GDX is among the equity ETFs that have weathered the recent storm relatively well; the fund is now up about 2% over the last four weeks and nearly 9% on the year (see GDX returns).
Disclosure: No positions at time of writing.
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