American equity markets finally broke their losing streak in Thursday trading ending six straight days of losses thanks to solid trade data that showed a smaller-than-expected trade deficit. As a result, the Dow gained 0.6% on the day while the S&P 500 posted a 0.7% gain as well. The tech-heavy Nasdaq, however, continued its recent trend of underperformance and only gained 0.4% on the day in comparison. Commodity markets finished the day higher as well as gold rose by about $3/oz. and oil continued its surge from yesterday’s session, rising by 1% to $101.75/bbl. Most soft commodities finished the day higher as well, led by corn and its 2.8% gain in the futures market after the USDA decreased its inventory estimate for the American crop. Thanks to this corn is now approaching a three year high and could surge further if continued tightness is seen in the supplies. “Today’s report should be viewed as very bullish,” Bill Gary, the president of Commodity Information Systems in Oklahoma City, said in a report to clients. Corn “ending stocks were forecast at the second tightest level in history,” based on reserves to cover daily usage, he said.
One of the biggest winners in the ETF world today was the Market Vectors Gold Miners ETF (GDX) which rose by 1.8% in Thursday trading. Today’s gains came as investors trended back towards gold in the session as both the ECB and the BOE kept their rates on hold for the time being. However, Trichet did say that ‘strong vigilance’ would be needed in order to keep inflation in check, possibly signalling that a rate hike would be in the cards before the end of the summer. Should this happen, it could boost the value of the euro against the greenback, increasing the appeal of precious metals in the process, especially for euro zone investors. Thanks to this, GDX rose far more than spot gold in Thursday trading, helping to end the recent slump for the popular fund which is down 6.4% over the past two weeks alone [see holdings of GDX here].
One of the biggest losers in the ETFdb 60 in Thursday trading was the United States Natural Gas Fund (UNG) which tumbled by 3.6% on the day. Despite scorching heat across much of the Midwest and East Coast for the early part of the week that could potentially boost demand in the next EIA report, traders sold off natural gas futures in today’s session thanks to a larger-than-expected increase in supplies. Analysts were expecting an increase of 77 bcf for the month but supplies actually rose by 80 bcf in the period ending June 3rd. Thanks to this boost, total supplies of the potent fuel now stand at 2.187 tcf, about 58 bcf below the five-year average for this time of the year. As a result, UNG sold off heavily in today’s session on volume that was more than three times normal, suggesting that despite the heat this week many are getting out of UNG while they still can [see charts of UNG here].
Disclosure: No positions at time of writing.