Daily ETF Roundup: Eyes On Bernanke, Markets On Eggshells

by on September 12, 2012 | ETFs Mentioned:

A day ahead of the Federal Reserve’s policy announcement had investors walking on eggshells, despite broad equity indexes posting multi-year highs over the past few days. With all eyes on Bernanke, many are wondering if there is actually fuel behind these recent rallies or if the bullish momentum has been just smoke. Mixed economic data has added to the speculation over whether or not the central bank will roll out yet another round of quantitative easing. Accross the Atlantic however, the Euro Zone made headway as the German Constitutional Court approved the proposed bailout fund, the European Stability Mechanism (ESM), but gave parliament veto powers over any future increases in the size of the fund. And with renewed optimism on the Euro Zone side, U.S. investors are now waiting to see if their hopes for additional stimulus will become reality [see also 5 Chart Patterns Every ETF Trader Should Know]. 

Global Market Overview: Eyes On Bernanke, Markets On Eggshells

After an early morning rally fueled by the German court ruling, equities struggled to hold onto gains for the rest of the session. Tech-heavy Nasdaq (QQQ) eked out the biggest gain, albeit only being a 0.31% uptick. The Dow Jones Industrial Average (DIA) and S&P 500 (SPY) also landed in positive territory, as telecom, industrial, and financial stocks posted strong performances on the day. In Europe, markets ended slightly higher after the German court ruling allowed the country to ratify the Euro Zone’s permanent bailout fund. Disappointing U.K. unemployment data however, weighed heavily on stocks. Asian equities rallied after Chinese Premier Wen Jiabao indicated that economic growth would meet the official target of 7.5% in 2012; China’s Shanghai Composite rose 0.3% and Japan’s Nikkei Stock Average gained 1.7%.

Bond ETF Roundup 

U.S. Treasury prices fell today after Germany’s court ruling spurred investors to shift their assets out of the safe haven. Lackluster demand from today’s government auction also weighed heavily on Treasuries, pushing 10-year yields to a three-week high.

Commodity ETF Roundup

As investors digested how another round of QE would impact the global economy, crude oil futures fell to $97 a barrel. Meanwhile, the U.S. Agriculture Department once again cut their estimates for the nation’s corn and soybean harvests, leading soybean prices to rise but corn prices to fall since the reduction for corn crop was smaller than expected. 

ETF Chart Of The Day #1: EWG

The iShares MSCI Germany Index Fund (EWG) was one of the best performers of the day, gaining 0.88% during the session. Following Germany’s court ruling, the ETF gapped significantly higher at the open. EWG slid sideways throughout the rest of the session, eventually settling below its high of $23.03 a share [see also Global Titans ETFdb Portfolio]. 

ETF Chart Of The Day #2: FXI

The iShares FTSE China 25 Index Fund (FXI) also logged a strong performance, gaining 1.14% on the day. After Chinese Premier Wen Jiabao said that economic growth would meet the official target of 7.5% in 2012, this ETF gapped significantly higher at the open. FXI inched slightly higher throughout the day after a brief mid-morning dip, eventually settling below its high of $33.84 a share [see the best performing ETFs in 2012]. 

ETF Fun Fact Of The Day

The ETF with the largest allocation to Verizon Communications (VZ) is the Telecom ETF (VOX) with its allocation to (VZ) of about 22.6%.

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Disclosure: No positions at time of writing.