And so the summer slump continues. Markets struggled once again to find a definitive direction today, essentially flat-lining but managing to eke out slight gains. Positive jobs data and a better-than-expected U.S. trade balance report seemingly overshadowed investors’ waning optimism over the ECB’s ability to tackle the region’s debt crisis. But with the U.S. economy at a precariously low growth rate, it seems as though no positive news will be able to fully jump start the markets. Instead, investors are holding out on central bankers, convinced that sooner or later they will step in to pick up the slack. And until there are any concrete developments, markets will likely continue to drift aimlessly – it will be like watching paint dry [see also 4 "Recession Proof" ETFs].
All three major U.S. equity indexes narrowly landed in positive territory, with Nasdaq (QQQ) slightly outperforming the Dow Jones Industrial Average (DIA) and S&P 500 (SPY). Asian equities closed higher after China’s consumer price inflation was reported to have eased for the fourth consecutive month. Although Australia’s employment data came in better-than-expected, EWA lost its footing, dipping into red territory.
Bond ETF Roundup
Yet another dismal day for Treasuries, as lackluster demand dominated today’s government auction of $16 billion 30-year notes. Initially, investors dumped their Treasury holdings, putting upward pressure on yields. But with prices at attractively low levels, bargain hunters quickly swooped in, helping recuperate some of the Treasuries’ earlier losses. In the corporate debt market, high yield junk bonds (JNK) took the spotlight, posting modest gains on the day
Commodity ETF Roundup
Commodities were slightly higher across the board today, with the exception of natural gas and soft commodities. U.S. natural gas storage data showed lower than expected supply levels in the previous week, pushing UNG down 1%. Sugar, coffee, and cotton futures slumped today, while grains remained at elevated levels.
ETF Chart Of The Day #1: JO
The Barclays iPath Dow Jones-UBS Coffee ETN (JO) plunged into negative territory today, shedding a dismal 1.86% on the session. Coffee futures dropped on a strong U.S. dollar, forcing this ETF to gap significantly lower at the open. JO slid sideways for the rest of the trading day, settling at $40.09 a share [see also The Five Minute Guide To Coffee ETFs].
ETF Chart Of The Day #2: GDXJ
After several dismal months of trading, the Van Eck Market Vectors Junior Gold Miners ETF (GDXJ) finally caught a break today after poor corporate earnings recently hammered the ETF. Alongside a small rally in gold, GDXJ surged throughout the trading day, gaining over 2.5%. The fund settled just below its high of $20.39 a share [see also Huge Gaps Between Metals, Miners ETFs].
ETF Fun Fact Of The Day
The U.S. Postal Service lost $5.2 billion in its third quarter, which is more than the total assets held by all but 50 ETFs. The loss exceeded the total assets of the Vanguard S&P 500 ETF (VOO, $5.1 billion), Health Care Sector SPDR (XLV, $4.9 billion), Alerian MLP Index ETN (AMJ, $5.1 billion), and FTSE China 25 Index Fund (FXI, $4.7 billion).
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Disclosure: No positions at time of writing.