In what was yet another rocky session for American equities, stocks finished the day lower once again for the most part as continued worries over the debt ceiling plagued markets. The Dow finished the day lower by 0.5% while the broader S&P 500 managed to lose just 0.3% on the day. Meanwhile, the Nasdaq, which has an awful day in Wednesday trading, outdid its counterparts today, managing to rise by a single point on the day. In commodity markets, most resources traded rangebound as gold added one dollar an ounce but oil slipped by about 30 cents a barrel, falling to within striking distance of the $97/bbl. level. Most of the softs and grains followed oil’s lead to the downside as sugar and cocoa headlined the losers, falling by 3.9% and 2.0%, respectively. Surprisingly, T-bills saw yields fall across the board in Thursday trading while the U.S. dollar remained flat against most major currencies of the world. This came despite a continued stalemate in the debt ceiling deal fight, increasing the uncertainty in the marketplace as the August second deadline approaches.
One of the biggest ETF winners on the day was the iShares FTSE China 25 Index Fund (FXI) which gained 0.7% in what was a down session for most corners of the market. Today’s gains were largely due to robust strength out of the industrial corner of the country as the Aluminum Corp of China (ACH) posted an extremely good day of trading. The industrial giant saw its shares rise by 7.3% on the day as aluminum prices hit a 15 month high on solid demand and market speculation. Prices for this key metal are now up close to 5% on the week, helping to bump ACH off of its 52 week low. This also increased demand for a number of other companies in the region and it helped to boost sentiment for the important energy sector as well; basic materials and energy combine to make up nearly 30% of FXI so strength out of ACH really helped to carry this fund higher in Thursday trading [see holdings of FXI here].
One of the biggest losers in the ETF world was the United States Natural Gas Fund (UNG) which tumbled by 2.1% in Thursday trading. Today’s losses, which came on slightly above average volume, were largely the result of the weekly EIA report which showed a slightly higher-than-expected build up of supplies. The agency said that supplies of the critical fuel rose by 43 bcf on the week, slightly higher than analyst expectations which called for an increase of between 38 and 41 bcf. This increase further adds to the already robust supplies of the fuel and considering the record heat across much of the nation, the somewhat-high addition in stockpiles was concerning to many analysts in the space. Thanks to these losses, UNG is now down 2.8% over the past five days and nearly 9.3% over the past three months [see charts of UNG here].
Disclosure: No positions at time of writing.