Investors were fixated on the words of Bernanke today, as the Fed Chairman delivered his much anticipated speech at the central bank’s annual economic symposium in Jackson Hole. Prior to the speech, investors flooded the market, spurring an early morning rally. But after Bernanke indicated that the central bank will not be taking immediate actions but that they are ready to step in should the economy worsen (essentially regurgitating what he has been saying for the past several months), stocks quickly sold off. But of course the reaction was short-lived and equities quickly climbed back up since now investors are apparently satisfied with another “hint” of QE3. And with the mere notion that the central bank is keeping all of their options on the table, markets ended the volatile session on a relatively high and optimistic note [create customized ETF analysis with the ETF Analyzer].
All three major indexes landed in positive territory today, closing higher for the month of August. The Dow Jones Industrial Average (DIA) and Nasdaq (QQQ) gained the most today after recouping mid-morning losses. The S&P 500 (SPY) rose 0.51%, led by strong performances by energy and material stocks; the materials sector surged today after factory orders reported the biggest jump in a year last month. In Europe, equities ticked broadly higher. Asian markets closed lower on the day as Japan’s Nikkei Stock Average dropped 1.6% and China’s Shanghai Composite fell 0.3%.
Bond ETF Roundup
As Bernanke kept alive hopes of a new bond-buying program to support the economic recovery, U.S. Treasuries rallied. Month-end buying of longer-dated bonds by fund managers also added to today’s rally. Despite today’s uptick however, U.S. Treasuries still ended lower for the month of August. In the corporate debt market, a record amount of junk rated bonds (JNK) were sold this month.
Commodity ETF Roundup
In response to Bernanke’s speech, investors piled into gold, silver, and other precious metals, sending prices skyward. Crude oil futures rallied, breaking a two-day losing streak, as the dollar fell and investors digested the latest comments from the Fed. Wheat futures tumbled today after Russia announced that it does not plan to place any restrictions on grain exports, spurring profit-hungry investors to lock-in gains.
ETF Chart Of The Day #1: GDXJ
The Van Eck Market Vectors Junior Gold Miners ETF (GDXJ) was one of the best performers today, gaining a whopping 5.45% during the session. Alongside gold’s rally, this ETF gapped slightly higher at the open, dipped during mid-morning hours, then continued to surge skyward throughout the day. GDXJ eventually settled just below its high of $21.73 a share. Weighing heavily on gold miner stocks and GDXJ has also been the violent labor strikes that have erupted in South Africa [see also GLD-Free Gold Bug ETFdb Portfolio].
ETF Chart Of The Day #2: SLV
The iShares Silver Trust (SLV) also had a strong performance today, gaining an incredible 4.59% on the day. Silver futures soared following Bernanke’s speech as investors remained optimistic about the possibility of additional stimulus measures. In response, this ETF gapped slightly higher at the open, and continued to rally throughout the day. SLV eventually settled just shy of its high of $30.80 a share [see also Jim Rogers: Silver Is a Better Investment Than Gold] .
ETF Fun Fact Of The Day
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Disclosure: No positions at time of writing.