Daily ETF Roundup: Markets Stall On ECB Jitters

by on September 5, 2012 | ETFs Mentioned:

As investors remain cautious ahead of tomorrow’s crucial ECB meeting, markets struggled to find a definitive direction, dipping in and out of red territory throughout the day. A sour manufacturing report from the Euro Zone weighed heavily on investors, as the Markit’s composite purchasing managers’ index fell in August from July. Bellwether delivery company FedEx also made today’s headlines, as the firm lowered its first-quarter earnings forecast, citing the global economic slowdown and weak output from Europe and China as the main factors for the decline. With these reports adding to the numerous red flags seen across the globe, investors have placed heavy expectations on ECB President Mario Draghi to deliver concrete plans to help boost the plagued region in tomorrow’s highly anticipated meeting [see Ten Commandments Of ETF Investing]. 

Global Market Overview: Markets Stall On ECB Jitters

The Dow Jones Industrial Average (DIA) was the only index that finished in positive territory today, squeezing out a small 0.09% gain. The S&P 500 (SPY) and Nasdaq (QQQ) closed slightly lower as material stocks continued to drag down the benchmarks. European markets posted modest gains on the day, despite the weak Euro Zone manufacturing report. Concerns over slowing growth led Asian equities lower today, with Japan’s Nikkei Stock Average shedding 1.1% and China’s Shanghai Composite dipping 0.3%.

Bond ETF Roundup 

ECB jitters dominated the U.S. Treasury market today, as a media report from the Euro Zone sent prices lower. The rumor hinted that the ECB is considering a more currency-neutral purchase program for sovereign bonds. Also weighing heavily on U.S. Treasuries were mounting concerns about the Federal Reserve and continuing speculation on any future stimulus measures.

Commodity ETF Roundup

Crude oil futures ended slightly higher, remaining above $95 per barrel, as investors awaited the ECB’s next move. Lackluster export demand and lower corn prices pushed wheat futures to a three-week low, while soybean prices also declined after hitting an all-time high on Tuesday. And while investors sat on the sidelines ahead of the ECB meeting, gold futures’ trading volume remained light and its price dipped from a near six-month high to close flat on the day. Copper, however, rallied on reports of a new Euro Zone bond-buying program.

ETF Chart Of The Day #1: IYT

The iShares Dow Jones Transportation Average Index Fund (IYT) was one of the worst performers, shedding 1.04% on the day. Bellwether deliver company FedEx makes up over 9.5% of IYT’s total assets, and following the company announcing its lowering of its first-quarter earnings forecast, this ETF gapped significantly lower at the open. IYT zigzagged lower, eventually settling above its low of $88.17 a share [see IYT Realtime Ratings].

ETF Chart Of The Day #2: NIB

The Barclays iPath Dow Jones-UBS Cocoa Total Return Sub-Index ETN (NIB) was one of the best performers of the day, gaining an incredible 3.59% during the session. Cocoa futures hit a fresh 10-month high after investors worried about tight supplies caused by persistent dry weather in southern growing areas of West Africa and Southeast Asia. In response, this ETN gapped slightly higher at the open, but then surged during afternoon hours. NIB eventually settled below its high of $36.62 a share [see also The Five Minute Guide To Cocoa ETFs].

ETF Fun Fact Of The Day

The best performing regional portfolio is our Ex-Europe ETFdb Model Portfolio in the trailing 1-year period. This strategy is up 9.05%.

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Disclosure: No positions at time of writing.