Daily ETF Roundup: GDX Climbs Despite Golds Fall, VWO Falls On Euro Speculation

by on December 6, 2011 | ETFs Mentioned:

Today saw markets teeter back and forth as they tried to forget the news that Standard and Poor’s put all 17 euro-zone nations on credit watch. Markets were able to come away with meager gains as the S&P jumped 0.11% and the Dow gained 52 points. Gold saw another down day as the precious metal lost $1.4/oz. Gold has been experiencing a lackluster performance as of late due to all of the worries in Europe and an overall lack of investor confidence. Though the metal has had a terrific 2011 overall, the last few months have been tough on gold as it has had its fair share of trouble gaining momentum [see also Three Commodities Dividend Lovers Must Own].

One of the more interesting developments out of today’s stock market came from an issue of stock by the Green Bay Packers. The NFL franchise is in need of money to update their stadium and aims to gain around $143 million through the offering. The team has made several offerings in the past and hopes that loyal fans will help keep the organization alive and running. Today also saw the launch of two new Global X ETFs that will focus on the NASDAQ index, furthering options for investors to play this mostly-tech benchmark. See QQQM and QQQV. Below, we outline two of the most notable ETF performances in an otherwise slow day [see also 2011: A Year Of ETF Firsts].

One of the biggest ETF winners on the day came from the Market Vectors TR Gold Miners (GDX), which gained 2%. The gains were quite surprising given that gold prices actually sank on the day. But a peek at the individual holdings of GDX reveals the truth behind the gains. After hearing news that the Fed has no plans to give money to the IMF relief aid, gold and silver futures soared as option activity spiked. This led to strong gains in the majority of GDX’s underlying miners, which caused the ETF to post a solid day despite the weakness displayed by the precious metal [see also What’s The Difference? Understanding What Distinguishes Similar ETFs].

One of the biggest ETF losers on the day came from the Emerging Markets ETF (VWO), which surrendered nearly 1.5% in Tuesday’s session. The losses were mainly sparked by more fears concerning the euro zone. Investors are left to speculate until European leaders meet on Friday to discuss their definitve plan for action. Though yesterday saw another bailout package for Greece, the S&P credit watch of the euro-zone certainly put a damper on investor confidence. Emerging markets are fragile enough as it is, but with the possibility of one of the world’s most powerful currencies collapsing, it makes sense to see these economies up in arms [see also Ten Unexpected Observations On YTD ETF Returns].

Disclosure: No positions at time of writing.