Despite the death of American icon and former Apple CEO Steve Jobs, American stocks rose yet again in Thursday trading, as investors bought up shares of securities across the board thanks to solid data and more hope from the ECB. The Dow gained about 1.7% on the session while the S&P posted a 1.8% jump and the Nasdaq led the way on the upside gaining 1.9% on the day. The banking sector was among the biggest winners on the day while large gains were also had in the basic materials and some corners of the tech market. For losers, most names in health care slumped while telecom and big oil also had trouble in Thursday’s session. In commodity markets, both oil and gold rose on the day as gold added about $11/oz. and oil continued its surge, rising by about 3.6% in today’s trading.
In currency trading, the U.S. dollar continued to slip against most of the world’s major currencies, falling close to the 78.55 mark to end the day. Losses were had against the big three of the euro, yen, and pound, while the Aussie dollar added about 1.0% on the day as well. Unsurprisingly, this led to further losses for Treasury bonds as the ten year note saw yields surge by 10 basis points on the day while the two year bond saw yields climb two basis points up to the 0.28% mark.
One of the biggest ETF winners on the day was the iShares MSCI Brazil Index Fund (EWZ) which surged by 5.0% in Thursday trading. These sharp gains came on further hopes of a sharp cut in interest rates in the near future for Brazil’s economy, possibly spurring growth in the emerging market. Recently, Brazilian President Dilma Rousseff has said that she wants to see the country’s rate drop with some sources saying that rate is scheduled to fall below 9% from its current level around 12%. Although the effect of this possible move on inflation remains uncertain, equity markets certainly liked the idea, at least for the time being, helping to push Brazilian stocks up sharply in Thursday’s trading session [see holdings of EWZ here].
One of the biggest ETF losers in the session was the iPath S&P 500 VIX Short-Term Futures ETN (VXX) which continued its recent slump, falling by 1.8% on the day. These losses were largely due to more solid data in the markets as jobless claims, although coming in slightly above 400,000, were well below expectations which called for 410k. This relative good news on the job front, coupled with more speculation over a strong response in euro zone banks, helped to limit demand for safe havens across the board. As a result, investors continued to sell out of this ETN representation of the ‘fear index’ during today’s trading session, pushing VXX to a loss of 7.4% so far this week [see more on VXX's fact sheet].
Disclosure: Long EWZ.