Markets were in for some thin trading today as investors remained cautious ahead of yet another weekend of fiscal cliff negotiations. Yesterday, President Obama and Republican House Speaker John Boehner met at the White House to discuss possible solutions to the automatic round of spending cuts and tax hikes that will come January 1st. This came shortly after Boehner accused the President of dragging out negotiations. In economic news, U.S. industrial production rose 1.1% in November, exceeding analysts’ expectations. Consumer prices for November fell more than economist had forecasted, mostly due to lower gasoline prices [see also 101 High Yielding ETFs For Every Dividend Investor].
All three major U.S. equity indexes ended in negative territory today on continuing fiscal cliff fears. Tech-heavy Nasdaq (QQQ) came in at the bottom of the barrel once again, losing 0.70% with Apple shares tumbling nearly 4.0%. The S&P 500 (SPY) slid 0.40%, while the Dow Jones Industrial Average (DIA) lost 0.26%. In Europe, equities were mostly lower after the preliminary eurozone purchasing managers’ index rose for December, showing a narrower contraction in activity and Standard & Poor’s cut its U.K. outlook from stable to negative. Asian markets ended higher today after China manufacturing PMI rose to a 14-month high in December; China’s Shanghai Composite rallied 4.3%, while Hong Kong’s Hang Seng inched 0.7% higher. Japan’s Nikkei Stock Average, however, slipped 0.1% after a survey of business sentiment among large manufacturers fell more than expected.
Bond ETF Roundup
U.S. Treasury prices finally rose today after a report showed a decreased risk of U.S. inflation. Yields on 10-year notes fell 3 basis points, while inflation-sensitive 30-year bond yields dropped 3 basis points and yields on 5-year notes remained little changed at 0.69%.
Commodity ETF Roundup
Commodities were mostly mixed today, with oil futures rallying on better-than-expected China PMI data, which showed manufacturing activity expanding for a second straight month. Precious metals were mostly flat, while prices for soybean, corn, and sugar were higher [see also The Best and Worst Industrial Metals ETFs of 2012].
ETF Chart Of The Day #1: YINN
The Direxion Daily China Bull 3x Shares (YINN, B) was one of the best performers today, gaining a whopping 4.58% during the session. Following China’s surprising uptick in PMI, this leveraged ETF gapped significantly higher at the open. YINN traded sideways for the remainder of the day, eventually settling at $16.91 a share [see also Asia-Centric ETFdb Portfolio].
ETF Chart Of The Day #2: HYD
The Van Eck Market Vectors High Yield Municipal Index ETF (HYD, A-) was one of the worst performers today, shedding an abysmal 3.21% during the session. Municipal bonds tumbled today on speculation that wealthier investors may see tax breaks reduced on income from municipal debt. In response, this ETF was sent into a free fall, eventually settling near its low of $31.93 a share [see also High-Tax Bracket ETF Portfolio].
ETF Fun Fact Of The Day
The best performing themed strategy from the trailing 1-week period is our Easy-As-ABC ETFdb Portfolio; this strategy is up 1.46%.
Disclosure: No positions at time of writing.