Daily ETF Roundup: VXX Jumps On Market Weakness, SPY Dips On Jobs Report,

by on November 4, 2011 | ETFs Mentioned:

Today was another volatile session as markets opened down and were never able to fully recover, despite a nice uptick towards the end of the day. All in all, it was a pretty rough week as the first two days set a negative tone for the coming month despite Wednesday’s and Thursday’s gains. The Dow lost 61 points Friday, to finish out the week below 12,000 while the S&P fared a bit worse, surrendering 7.6 points to the choppy markets. Though oil was beat down mid-way through the trading session, the fossil fuel rallied to finish the day above $94 per barrel, while most other asset classes finished the day in the red [see also Three Things Wall Street Journal Didn’t Tell You About Commodities].

Perhaps the biggest news on the day came from the U.S. jobs report, which ultimately disappointed analysts. The day also saw the long-awaited IPO from Groupon (GRPN), who has long been working to go public, end with a massive increase as expected. But despite the strong day for the young company, a number of analysts are still not convinced in the long-term outlook for Groupon, leaving something of a foggy future for one of the fastest growing firms ever. This week saw the launch of several new ETFs, keeping up with a backbreaking pace for 2011, which is already the best year ever as far as ETF launches are concerned. Below, we outline two of the most notable performances on the day [see also PIMCO Launches Aussie Bond ETF].

One of the biggest ETF winners came from the S&P 500 VIX Short-Term Futures ETN (VXX) which added 2.2% in Friday’s trading. In these sideways, but still volatile markets, it won’t be a surprise to see VXX top this list as either a strong or weak performer, especially given all of the turmoil in the global economy. Despite its back and forth performance as of late, this ETF was able to prey on weak markets, though it had a surprisingly low ADV of just 19.2 million compared to its three month average of nearly 41.9 million shares traded daily. Though the fund has had its fair share of tough days, VXX is up 12.5% on the year [see also 25 Things Every Financial Advisor Should Know About ETFs].

One of the biggest ETF losses on the day was posted by the ETF king, SPDR S&P 500 (SPY). The massive fund lost 0.61% on the day as the jobs report for the month of October came in worse than expected. Though we were finally able to lower unemployment from 9.1% to 9.0%, which would seem like good news, October only added 80,000 jobs; the slowest hiring rate in four months. Though we hit something of a slowdown in hiring, it does bode well that we were able to drop the unemployment rate, but that can act as a double edge sword, especially if next month sees slow hiring; a rising unemployment would have a much worse effect on markets than a slow hiring month, so be sure to carefully monitor jobs reports in the coming months as we could very easily jump back up to 9.1% [see also ETF Insider: Greek Drama Steals Spotlight]. 

Disclosure: No positions at time of writing.