Equity markets trended modestly upwards to start trading on Wednesday, but sold off in the last 90 minutes as investor confidence plunged following the release of the Fed’s Beige Book. The major indexes were all down between 0.4% and 0.6% on the day, while gold slid from its record high yesterday to close just shy of $1,230/oz. One of the biggest winners on the day was oil, which surged higher towards the $74/bbl. mark on hopes of rising demand and declining inventories. However, this news could not helped beleaguered BP which, according to some analysts, may be forced to seek bankruptcy protection in about a month. Shares of BP fell by almost 15% on the day.
The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, inched down 0.88 points, or 0.1%, to close at 992.87. Winners and losers were split almost down the middle, with most components finishing the day roughly where they began.
One of the biggest gainers on the day was the iShares FTSE/Xinhua China 25 Index Fund (FXI), which rose by 0.7% in Wednesday trading. This increase was thanks in large part to bullish figures out of the country in regards to Chinese exports, which grew 50% in May from a year earlier, well ahead of a forecasted increase of 32% (see holdings of FXI here).
One of the biggest losers on the day was the United States Natural Gas Fund (UNG), which sank by 2.4% in Wednesday trading. This came after continued predictions of temperate weather over the next few weeks, which could decrease the demand for natural gas. “The summer’s got people scared about possible heat, and the hurricane season is forecast to be very active,” said Kyle Cooper, an analyst with IAF Advisors in Houston. “But we still have relatively bearish fundamentals, so we’re finding it hard to move higher.”
Disclosure: no positions at time of writing.