Wall Street braced itself for yet another day of fiscal cliff negotiations after House Speak John Boehner proposed a “Plan B” option, in which the Bush-era tax cut for people making less than $1 million would be extended, but deferred a plan on spending cuts. The plan was rejected, but President Obama made a counteroffer that included a major change in his position on tax hikes for the wealthy; Obama proposed $1.2 trillion in higher tax revenue from those earning over $400,000 and $1.22 trillion in spending cuts. Though initial reaction was somewhat mixed, investors were at least satisfied with the apparent progress of the negotiations [see also 101 High Yielding ETFs For Every Dividend Investor].
All three major U.S. equity indexes ended in positive territory today, boosted by positive budget talks, solid housing data, and lower-than expected U.S. current account deficit figures. Led by strong gains in tech stocks, Nasdaq (QQQ) came out on top today, rallying 1.46%. The S&P 500 (SPY) gained 1.15%, while the Dow Jones Industrial Average (DIA) rose 0.87%. In Europe, markets were mostly lower after Sweden’s central bank cut its leading interest rate. Asian equities rallied with Japan’s Nikkei Stock Average gaining 1% and China’s Shanghai Composite inching 0.1% higher.
Bond ETF Roundup
U.S. Treasury prices fell today as investors digested the latest developments in Washington. Yields on 30-year bonds rose to their highest level in almost two months, while 10-year note yields rose 5 basis points and 5-year notes added 4 basis points.
Commodity ETF Roundup
Commodities were mostly lower today, with precious metals, namely gold, tumbling on fiscal cliff talk hopes. Energy futures, however, rallied, with Brent crude and RBOB Gasoline gaining 1.20% and 1.33%, respectively [see also 13 High-Yielding Commodities For 2013].
ETF Chart Of The Day #1: XES
The State Street SPDR S&P Oil & Gas Equipment & Services ETF (XES, A-) was one of the best performers today, gaining a whopping 3.56% during the session. Boosted by strong gains in energy shares, this ETF popped at the open, only to continue rising throughout the day. XES eventually settled near its high of $34.97 a share [see also Energy Bull ETFdb Portfolio].
ETF Chart Of The Day #2: VXX
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX, B+) was one of the worst performers today, shedding an abysmal 3.89% during the session. Following seemingly positive developments in the fiscal cliff talks, the CBOE Volatility Index (VIX) ended below 16. VXX gapped significantly lower at the open, only to fall for the remainder of the session and eventually settle at $28.15 a share [see also Low Volatility Portfolio].
ETF Fun Fact Of The Day
The best performing themed strategy from the trailing 4-week period is our Aggressive Portfolio; this strategy is up an impressive 4.19%.
Disclosure: No positions at time of writing.