U.S. equity markets rose higher in Thursday trading as speculation over solid earnings reports in the coming days helped to boost investors sentiment. The Dow rose by 85 points while the S&P 500 gained 0.9% in the session, but both gains paled in comparison to the tech-heavy Nasdaq, which added 1.4% on the day due to another strong day out of the semiconductor segment and a solid performance out of the software industry as well. Commodity markets didn’t fare nearly as well, however, as oil sank by about $0.40/bbl and gold, which at one point flirted with the $1,450/oz. mark, ended the day lower by about $10/oz. Soft commodities and grains did manage to buck the trend though, as wheat, sugar, cotton, and corn, reversed their downturn and all rose at least 2.8% in the session. Lastly, the demand for the U.S. dollar weakened slightly as the greenback lost against most of the world’s major currencies and traders sold off their T-Bill holdings, pushing yields on most maturities up and putting the two-year note at a yield of 0.69%. One of the biggest winners in the ETFdb 60 was the iShares MSCI South Korea Index Fund (EWY), which gained 2.1% in Thursday trading. Today’s gains came on continued speculation over Korea’s ability to not only help Japan rebuild but to steal market share from the nation in industries such as shipbuilding and steel. With prospects of supply disruptions continuing for the next six months or more, it may be enough to give the Koreans the edge that they need to catch up to the Japanese. In fact, this trend has already started as Samsung Heavy Industries received a deal for six container ships valued at roughly $816 million, a trend that could continue further if shipments of LNG to Japan pick up in the months ahead as a way to supply the nation with fuel, further giving South Korea a chance to show its industrial prowess [see holdings of EWY here].
One of the biggest losers on the day was the United States Natural Gas Fund (UNG), which tumbled by 2.1% in the session. Today’s losses came as the EIA gave its weekly storage report of the fuel, releasing numbers that were in-line with estimates, but well below the five-year average draw. Figures showed that just 6bcf left the stockpiles last week, slightly better than predictions of 5 billion cubic feet but well below the five year average level of just over 17bcf. Due to this, investors felt as though natural gas, which was at a multi-month high, may have topped out for the time being, leading to a sell-0ff in futures and UNG. “Given the run-up we’ve had this week, we’re seeing a release of some of that buying pressure,” said Kent Bayazitoglu, an analyst with Gelber & Associates in Houston. “We expected prices to fall off after the storage report if the number was within expectations.” [see charts of UNG here].
Disclosure: No positions at time of writing.