American equity markets soared to start Friday trading, fell back to earth, but still managed to ultimately post modest gains to close out the week. The Dow rose by 50 points while the Nasdaq and S&P 500 rose by 0.2% and 0.3%, respectively as strong performances out of Apple, and some basic materials companies helped to carry the day. Commodity markets were more mixed, however, as gold lost $6/oz. and oil added just $0.04 on the day as demand for safe havens cooled slightly in the session. Investors did, on the other hand, scoop up a variety of agricultural commodities as livestock products gained, and grains and softs rose broadly as well. Meanwhile, bond prices tumbled as Federal Reserve official Charles Plosser called for swift changes to Fed policy. In the speech, Plosser called for hikes from the current rate level of roughly zero percent up to 2.5% within the year in order to instill confidence in the monetary system and fight inflation. Thanks to these comments, yields on government debt rose modestly to close out the week as the 10 finished with a yield of 3.44%One of the biggest losers in the ETFdb 60 today was the iShares MSCI Japan Index Fund (EWJ) which tumbled by 2.4% to close out the week. Today’s losses were largely the result of continued fears over radiation at the Fukushima nuclear power plant which many believe may still be leaking. The situation remains tense at the plant and reports of highly radioactive water and sick engineers did not help matters, prompting some traders to sell off EWJ. Additionally, the long-term impact from the quake looks to be pretty severe and could impact businesses across the country thanks to the loss of power. This could hurt many companies’ bottom lines and could be another potential reason for EWJ’s slide in Friday trading [see more fundamentals of EWJ here].
One of the biggest gainers on the day was the United States Natural Gas Fund (UNG) which soared higher by 4.2% in Friday trading. Today’s gains, greatly helped to reverse yesterday’s slide in the popular heating fuel, which fell after the EIA storage report disappointed traders. The main catalyst for this shift was a report that a series of storms would be hitting the country in late March and early April. The storm is apparently making it difficult for forecasters to determine what the temperature will be like in major gas consuming markets, potentially making for a volatile week ahead for the fuel. “Apparently some traders decided to go long in the last few minutes since it’s going to be cold next week,” said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas. “Some traders are probably also buying contracts to cover their short positions before the contract expires.” [see more on UNG's fact sheet].
Disclosure: No positions at time of writing.