U.S. equity markets capped off the first quarter on a mixed note as surging oil prices and a lukewarm unemployment claims report left stocks on rocky footing heading into April. The Dow, which at one point was up about 30 points on the session, finished the day lower by 31 while the S&P 500 finished down 0.2% and the tech-heavy Nasdaq managed to squeak by with a gain of 0.2%. Commodity markets, on the other hand, finished markedly higher in the session as gold gained $10/oz. and oil surged higher by $2.30/bbl. Grains were also extremely active on the day as the USDA released information regarding plantings for all of the major crops, sending prices higher across the board in the sector. However, most traders stayed out of Thursday trading, instead waiting for tomorrow’s key jobs report.“The employment picture is heading in the right direction, and the market is anticipating tomorrow’s employment report a great deal,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank. “Let’s hope it’s 200,000 or a little better, but not too much or else we’ll start talking about raising interest rates.”
One of the biggest winners in the ETFdb 60 on the day was the PowerShares DB Agriculture Fund (DBA) which soared by 1.7% in Thursday trading. Today’s large gains were largely the result of a bullish crop report from the USDA regarding anticipated plantings in the spring. The number of anticipated acres to be planted with corn, wheat, and cotton surged when compared to last year’s levels, suggesting to many analysts that farmers are looking for higher prices in these crops in the fall and are hoping to take advantage of these price trends. Thanks to this news, wheat prices surged by 5% while corn jumped 4.5% in Thursday trading. Both of these products combine to make up roughly one-fourth of DBA’s assets so a strong day from these two crops helped to buoy the fund overall during the day’s session [see more on DBA's fact sheet].
One of the biggest losers on the day was the iShares MSCI Japan Index Fund (EWJ), which tumbled by 1.3% in the session. Today’s losses were largely the result of continued fears over radiation and its spreading impact across the region. Radiation higher than the regulatory limit was found in beef in the Fukushima Prefecture and most of it was in the form of Cesium 137, which has a half life of 30 years. This potent element was also found in the ocean around the plant raising concerns over just how contained the disaster is at the nuclear power plant. “That’s the one I am worried about,” said Michael Friedlander, a U.S.-based nuclear engineer, explaining cesium might linger much longer in the ecosystem. “Plankton absorbs the cesium, the fish eat the plankton, the bigger fish eat smaller fish — so every step you go up the food chain, the concentration of cesium gets higher.” Due to these creeping long-term concerns, investors are continuing to stay away from Japanese equities, prompting a sell-off in EWJ to close out the quarter [see holdings of EWJ here].
Disclosure: No positions at time of writing.