For the third day in a row, U.S. stocks slid into red territory as investors grew more apprehensive about Euro Zone’s unfolding debt drama, China’s wavering economy, and the start of the U.S.’s upcoming earnings season. After last week’s onslaught of lackluster economic reports, investors are once again bracing themselves for poor data, maintaining a rather pessimistic view of both the domestic and global economy. With investor sentiments going south, stocks couldn’t hold their ground: the Dow Jones Industrial Average slid 0.3%, while the S&P lost 0.2% and Nasdaq shed 0.2% [see also ETF Insider: Earnings Jitters Are Back].
Today, investors waded through several economic reports from across the globe, starting with the Chinese consumer and producer price indexes. China’s CPI was reported at 2.2%, well below the previous reading of 3.0%, while its PPI for the month of June fell drastically to -2.1%. In the Euro Zone, the German trade balance came in at 15.3 billion euros, which was the result of a significant increase in both exports and imports. Despite the positive news, Euro Zone investor confidence levels fell for the month of July, dropping slightly lower than expected. Lastly, U.S. Consumer Credit jumped to its highest level this year: the Fed reported that total credit rose by $17.1 billion in May [see ETF Technical Trading FAQ].
The United States Natural Gas Fund (UNG) was one of the best performers, gaining 3.58% on the day. As weather forecasts reported the continuation of record high temperatures, this ETF along with natural gas futures soared today. UNG gapped significantly higher at the open, only to inch even higher throughout the day. UNG settled just below its high of $19.76 a share [see also Inside Natural Gas and UNG's Wild Q2].
The iShares FTSE China 25 Index Fund (FXI) was one of the worst performers, shedding 1.20% on the day. While reports today showed China’s inflation declining to its lowest levels in over two years, investors remained leery of the struggling economy and its ability to make a significant turnaround. As investor confidence in China continues to decline, this ETF gapped significantly lower at the open [see also Asia-Centric ETFdb Portfolio].
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Disclosure: No positions at time of writing.