Now a days it looks like just about everyone’s printing money – first the ECB with its massive bailout program, then the Fed’s infamous and coveted QE3, and now yet another central bank joins the club: Japan. Today, the Bank of Japan took a surprising move, announcing an aggressive expansion of its monetary easing program. The policy board detailed that they would increase the size of its asset-purchase program to a whopping $1.01 trillion and extend its deadline by six months to the end of 2013. With three global heavy hitters lining up to pump trillions of dollars into their economies, many investors are now trying to quantify and project the implications of these massive programs – will money printing “stimulate” the economy, or will the onslaught of currency supplies only do more harm than good? [see also Seven Simple & Cheap All-ETF Model Portfolios].
On the homefront, better-than-expected existing home sales helped bolster stocks. The Dow Jones Industrial Average (DIA) and S&P 500 (SPY) posted a modest 0.1% and 0.12% gain on the day. Meanwhile, tech-heavy Nasdaq (QQQ) logged a 0.15% uptick. With the announcement of Japan’s expansion of its stimulus program, Asian equities rallied: Japan’s Nikkei Stock Average rose 1.2% to close at a 4.5 month high. In Europe, markets managed to eke out a small gain, its first in three days.
Bond ETF Roundup
U.S Treasuries rose for a third day in a row, as concerns surrounding Europe, a positive U.S. housing data report, and Japan’s earlier-than-expected policy move weighed heavily on the safe haven.
Commodity ETF Roundup
Bearish sentiment continued in oil today, pushing prices lower for a third-straight session after the government report showed a larger-than-expected supply increase. Meanwhile, gold surged to intraday levels not seen since late February following Japan’s unexpected stimulus announcement.
ETF Chart Of The Day #1: FXY
The Rydex CurrencyShares Japanese Yen Trust (FXY) got somewhat of a boost today, gaining 0.61% during the session. Following the Bank of Japan’s policy report, the dollar initially gained against the yen, but the greenback quickly turned back down, forcing this ETF to lose some of its gains earlier in the day. FXY straddled the flat line for the rest of the afternoon, eventually settling below its high of $125.44 a share [see also Cure For The Common China ETF?].
ETF Chart Of The Day #2: ITB
The iShares Dow Jones U.S. Home Construction Index Fund (ITB) was one of the best performers, gaining an incredible 2.61% during the session. As investors digested today’s better-than-expected existing home sales data, homebuilder equities including Pulte (PHM), Beazer (BZH), and DR Horton (DHI) traded sharply higher, spurring this ETF to surge higher. ITB eventually settled below its high of $20.21 a share [see also 5 ETF Superstars of 2012].
ETF Fun Fact Of The Day
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Disclosure: No positions at time of writing.