Daily ETF Roundup: UNG Tumbles, EWZ Soars

by on April 1, 2011 | ETFs Mentioned:

American equity markets rose across the board today as a solid jobs report helped to buoy the market. Payrolls climbed by 216,000 in total, helping to push the jobless rate down to 8.8% suggesting to many that the economy could come back sooner than expected. “The speed of the decline in the unemployment rate already is putting pessimists to shame,” said Robert Brusca, chief economist at FAO Economics. As a result, the Dow rose by 57 points in the session, while the Nasdaq and S&P 500 gained 0.3% and 0.5%, respectively. Commodities were more mixed in the session as safe haven metal demand fell and gold sank by $9/oz. while oil surged higher in the session, gaining close to $1.5/bbl. to finish above the $108 mark.  Corn was also another big winner as the staple crop soared another 6% in Friday trading, helping to keep the grain market afloat on a day that most other crops experienced mild levels of weakness.

One of the biggest winners on the day was the iShares MSCI Brazil Index Fund (EWZ) which surged by 2.2% to close out the week. Once again, Brazil was boosted by strong commodity prices for many of its staple products such as sugar and oil which both surged higher on the day. This oil price strength helped to send the fund’s top component, Petroleo Brasileiro, up 2.4% in Friday trading. The company makes up 20% of the fund’s total assets so any large moves in this company tend to have an outsized impact on EWZ’s total return. Thanks to robust commodity prices, EWZ has made a nice comeback over the past few sessions, gaining 5.4% over the past week and 7.8% in the past two weeks alone [see holdings of EWZ here].

One of the biggest ETF losers in today’s trading was the United States Natural Gas Fund (UNG) which fell by 1.4% in the session. Today’s losses came as the weather forecast for many of the country’s largest gas consuming markets moderated, leaving many traders to question how much demand could be left for the heating fuel this season. According to the WSJ, forecasters are looking for above-average temperatures in the week from April 6th-April 10th across much of the Mid-Atlantic and Midwest, potentially curtailing demand.  Despite these losses, UNG has had a relatively-strong two week stretch, gaining 3.7% in the period as several rigs were shutdown, easing fears temporarily over extra supplies in the market [see more on UNG's fact sheet].

Disclosure: long EWZ.