Bearish pressures prevailed on Wednesday as major equity indexes on Wall Street fell victim to profit taking after a less-than-stellar durable goods data release. The Dow Jones Industrial Average led the way lower for a second trading session in a row, shedding 0.54% on the day, while Nasdaq and S&P 500 tied, each losing 0.49% on the day. Surprisingly, gold headed south alongside equity markets; futures prices for the precious metal lost upwards of 1% on the day, settling near $1,660 an ounce [see Gold Hits Resistance, Time To Worry?].
On the home front, selling pressures built up after durable goods data missed the mark. Durable goods orders grew by 2.2% last month, which missed analysts estimates of 2.9%, although it was still an improvement from the previous reading of negative 3.6%. News from overseas were also less than encouraging; United Kingdom GDP came in at 0.5% versus the expected 0.7%, while German CPI came in at 2.1% versus the expected 2.2%. Although economic data releases were far from worrisome, investors nonetheless expressed their concerns and took profits from various corners of the market [see also Greedy When Others Are Fearful ETFdb Portfolio].
Gains were sparse on Wednesday and the iShares S&P California Muni Bond Fund (CMF) was one of the strongest performers, gaining 0.25% on the day. There were no relevant fundamental news to justify the price action in CMF; perhaps investors simply jumped ship from equities and into bonds as euphoria levels on Wall Street faded. CMF has gained close to 2% from a year-to-date performance perspective [see Bond ETFs For Every Objective].
On the flip side, losses were abundant and the iShares MSCI Brazil Index Fund (EWZ) was one of the weakest performers, shedding 2.17% on the day. Emerging markets equity funds took a hit across the board, and EWZ was no exception, as investors scaled back their risk exposure following a disappointing durable goods data release on the home front. Despite today’s sell-off, this ETF is still up an impressive 13% year-to-date [see also BRIC-or-Bust ETFdb Portfolio].
Disclosure: No positions at time of writing.