Anticipation was the name of the game today. Investors across the globe continued to place bets on central bankers picking up the “economic slack”, hoping that further stimulus is on the way. With the elusive safety net seemingly ready to swoop in at any time, traders flooded the markets, extending gains for the third straight day. Today’s rally followed Federal Reserve Bank of Boston President Eric Rosengren’s comments yesterday, where he urged the central bank to launch an aggressive open-ended bond buying program to boost the economy. Investors seem to agree with Rosengren’s call to action, placing all their hopes in the Fed and the ECB to essentially clean up the global economic mess [see Announcing The ETF Analyzer: Even More Data At Your Fingertips].
Led by energy equities, the S&P 500 finally closed above the psychologically significant 1400 level for the first time today in three months, pushing SPY up 0.50%. The Dow Jones Industrial Average (DIA) and Nasdaq (QQQ) also ended in positive territory after Federal Reserve Official Rosengren urged the central bank to take more aggressive stimulus actions. Also in today’s headlines, the Labor Department reported that the number of U.S. job openings increased in the month of June. U.S. consumer credit also expanded, but at its slowest pace in eight months.
Bond ETF Roundup
A government auction of $32 billion in three-year notes was met with lackluster demand today, as investors shied away from the “safe haven” in hopes of more Fed stimulus coming their way. After the sale, Treasury prices continued to fall, pushing the 10-year yield to its highest level in five weeks.
Commodity ETF Roundup
Natural Gas and crude oil futures took the spotlight today, rallying on positive market sentiment and a weakened U.S. dollar. Crude managed to hit its 12-week high at $93.67 a barrel after concerns grew over the short-term supply levels. Copper futures (JJC) also posted positive gains, continuing its three day winning streak.
ETF Chart Of The Day #1: XLE
The State Street Energy Select Sector SPDR ETF (XLE) got a nice boost today as energy shares surged, leading stocks higher. XLE gapped higher at the open, and continued to inch higher throughout the day. The fund closed with a 1.5% gain, settling just below its high of $72.00 a share [see also Energy Bull ETFdb Portfolio].
ETF Chart Of The Day #2: EMCD
Two of State Street’s bond ETFs, the SPDR S&P VRDO Municipal Bond ETF (VRD) and the SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (EMCD), were in the spotlight today as “erroneous trades” forced Nasdaq to halt trading for six minutes around noon time. VRD briefly plummeted below $17 a share before snapping back to $29.9, while EMCD price range fluctuated from $29.02 to $50.76 a share in a matter of minutes [see also How To Lose Money Trading ETFs].
ETF Fun Fact Of The Day
The S&P 500 SPDR (SPY) has approximately 785 million shares outstanding and an average daily trading volume of 165 million shares, indicating the average holding period for the world’s largest ETF is about five days.
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Disclosure: No positions at time of writing.