Bullish euphoria took a backseat today as markets took their time to digest Monday’s big jump. Pessimism crept back onto the stock front after Chairman Bernanke commented that the Fed doesn’t have the necessary tools to shield the economy from the potential harm that could arise from the much-feared “fiscal cliff”. Investors’ confidence also took a hit after Best Buy posted disappointing earnings results, although better-than-expected housing starts data did offer some relief [see also How To Pick The Right ETF Every Time].
Shares of Apple kicked off the session on a very positive note only to give into profit taking pressures and drag the Nasdaq ETF (QQQ, A-) to the bottom of the barrel among major domestic equity indexes; the Dow Jones Industrial Average ETF (DIA, A-) turned in the best performance on the day, while the S&P 500 ETF (SPY, A) trailed closely behind [Download 101 ETF Lessons Every Financial Advisor Should Learn].
Bond ETF Roundup
Slightly bullish price action on Wall Street didn’t bode too well for most fixed-income securities; U.S. Treasuries led the way lower with TIPS trailing closely behind, while “junk bonds” took advantage of “risk on” sentiment and inched higher on the day.
Commodity ETF Roundup
Commodity prices were all over the board as a flat U.S. dollar collided with sideways stock market price action on the day. Gold prices dipped just below $1,730 an ounce while USO took a much bigger tumble on the day, settling below $87 a barrel.
ETF Chart Of The Day #1: UNG
The United States Natural Gas Fund (UNG, B-) was one of the best performers, gaining 2.55% on the day. Natural gas futures have been creeping higher over the past few weeks as many are speculating that this winter will bring colder weather, and drive up demand for the fossil fuel, compared to last years’s record warm temperatures. UNG kicked off the session with a rally and buying pressures persisted throughout the entire day, finally settling at $22.50 a share [see our Energy Bull ETFdb Portfolio].
ETF Chart Of The Day #2: VXX
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX, B) was one of the worst performers, shedding 1.70% on the day. Volatility levels declined for a second day in a row this week despite a fairly quiet day on the stock market. Better-than-expected housing starts data helped to restore confidence and the Volatility Index (VIX) settled just barely above the 15 mark as the closing bell rang [see also 5 ETF Strategies To Reign In Risk].
ETF Fun Fact Of The Day
The best performing strategy from the trailing 4-week period is our Risk On ETFdb Portfolio; this strategy is up 1.03%, while the rest of the portfolios are largely in negative territory over this time period.
Disclosure: No positions at time of writing.