Bullish euphoria died down over the weekend as major equity indexes slipped back into red territory on Monday following last week’s massive rally. The European Central Bank’s decision to implement a more flexible bond-buying plan was well received by markets last week, however, the spotlight now comes onto the Federal Reserve as investors await for Bernanke to follow in Draghi’s footsteps. Following the sour employment report from last Friday, investors’ hopes for additional stimulus on the home front have intensified; this puts even more pressure on Chairman Bernanke to pull the “stimulus-trigger” so to speak this Thursday at the FOMC press conference [see also ETF Insider: Pressure On Fed To Follow].
On Wall Street, major equity indexes broadly traded lower and the Nasdaq finished in last place as heavy selling pressures in shares of Apple dragged the tech-heavy benchmark lower. The Dow Jones Industrial Average proved most resilient, edging down 0.39% for the day while the S&P 500 Index shed 0.61%. Investors are looking ahead to Thursday’s pivotal FOMC rate decision in anticipation that Chairman Bernanke will confirm another round of stimulus to fuel the slow recovery at home.
Bond ETF Roundup
Last week, the ECB held off from lowering interest rates as it instead announced its “open monetary transaction” plan to expand its bond-buying initiative. This announcement puts pressure on the Fed to introduce a stimulus program of their own this week, which lead to a slow start for Treasuries on Monday. The bond market as a whole will likely move sideways throughout the week in anticipation of Thursday’s FOMC meeting.
Commodity ETF Roundup
Profit taking on Wall Street propped the U.S. dollar higher, although ultimately this had little to no impact on commodity prices for the day. Gold prices retraced lower by nearly 1% on the day after piercing the $1,700 an ounce level last week. Natural gas was the biggest winner, with UNG popping 5%, following last week’s 3-day losing streak.
ETF Chart Of The Day #1: GREK
The Global X FTSE Greece 20 ETF (GREK) was one of the best performers, gaining an impressive 4.43% on the day. Above-average trading volumes bolstered GREK higher for a fifth day in a row; this ETF settled above the $14 level on Monday despite ongoing talks between Greek officials and Eurozone policymakers which continue to showcase all of roadblocks standing in the way of financial aid for the debt burdened country [see our Euro Free ETFdb Portfolio].
ETF Chart Of The Day #2: EWZ
The iShares MSCI Brazil Index Fund (EWZ) was one of the worst performers, losing 2.15% on the day. Equity markets overseas drifted lower as analysts voiced their expectations for Brazil’s central bank to cut interest rates in October. Such a move would suggest that economic growth in Brazil remains sluggish at best, seeing as how this rate cut would mark the bank’s tenth attempt at revitalizing the slowing economy [see also Peter Schiff: The Only Way To Fix The Economy Is To Let It Fail].
ETF Fun Fact Of The Day
The best performing regional portfolio is our Africa-Centric ETFdb Portfolio; this strategy is up an impressive 16.94% from a year-to-date perspective.
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Disclosure: No positions at time of writing.