Wall Street endured a rather bleak trading day, as slowing global growth fears put a damper on expectations for the coming earnings season. Weighing heavily on the markets, the International Monetary Fund announced overnight that it cut its forecast for global economic expansion to 3.3% from 3.5% in 2012. Meanwhile, the National Federation of Independent Business small-buisiness optimism index came in below expectations for the month of September. And while equities have enjoyed a surprisingly successful ride thus far in 2012, the majority of investors believe that this coming earnings season will reflect the rather grim outlook many have on the global economy [see 101 ETF Lessons Every Advisor Should Learn].
Following the IMF’s sour outlook, all three major U.S. equity indexes slipped into negative territory. Nasdaq (QQQ) came in at the bottom of the barrel, shedding 1.52% as tech stocks with heavy international exposure pulled the index lower. The Dow Jones Industrial Average (DIA) and S&P 500 (SPY) also fell into the red, posting 0.81% and 0.99% losses respectively. In Europe, equities also fell after German Chancellor Angela Merkel was met with thousands of protestors in Athens when she went to meet the Greek Prime Minister for the first time since the country’s debt crisis began. Asian markets were mixed after the People’s Bank of China injected a large amount of liquidity into the banking system, forcing the Shanghai Composite to jump 2%. Japan’s Nikkei Stock Averaged dropped 1.1.%.
Bond ETF Roundup
U.S. Treasuries gained today as investors flocked to the safe haven after the IMF’s report stirred global growth worries. Protests in Greece and the continuing Euro Zone crisis also weighed heavily on Treasuries.
Commodity ETF Roundup
Despite heightened tensions surrounding the health of the global economy, gold lost some of its luster today as the precious metal lost more than $10 an ounce. Energy futures, on the other hand, rallied; crude oil gained more than $3 per barrel because of supply concerns and China’s easing measures.
ETF Chart Of The Day #1: UCO
The ProShares Ultra DJ-UBS Crude Oil Fund (UCO) was one of the best performers today, gaining a whopping 5.42% during the session. Crude oil futures rose to their best in more than a week today as China took additional stimulus measure to support its economy, leading many to believe that demand may rise for this top consumer of oil. As a result, the leveraged UCO gapped slightly higher at the open, only to surge higher throughout the day. After sliding sideways during the final hour of trading, the fund eventually settled below its high of $31.60 a share [see also Top 5 Global Oil Stocks by Market Cap].
ETF Chart Of The Day #2: XLK
The State Street Technology Select SPDR ETF (XLK) was one of the worst performers today, shedding 1.28% during the session. Technology stocks, which tend to have high international exposure, plummetted today after the IMF announced its cut on the outlook of the global economy. In response, XLK gapped slightly lower at the open, only to free fall during mid-morning trading hours. The fund eventually settled near its low of $30.09 a share [see also 7 Leveraged ETFs Every Day Trader Must Know].
ETF Fun Fact Of The Day
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Disclosure: No positions at time of writing.