U.S. stocks inched broadly lower this morning, as investors anticipate the release of the Federal Reserve’s minutes from its last policy meeting. During that meeting, the Fed announced the extension of its Operation Twist program through the end of the year, leaving investors somewhat underwhelmed at the lack of a more aggressive policy to help boost the economy. Although the Fed expressed its willingness to take further actions if necessary, investors are now hoping to find more clues about whether or not these actions will come into fruition. Adding to the already heightened level of uncertainty, markets continue to struggle in finding a definitive direction as Q2′s earnings season unfolds [see also Seven Simple & Cheap ETF Model Portfolio].
Commodity news took over most of today’s major headlines after yesterday’s rather dismal trading session. The. U.S. Department of Agriculture slashed its forecasts for this year’s corn harvest, citing that extreme heat and severe droughts in the Midwest have significantly damaged supply levels. The USDA also cut its forecasts for soybean inventories, placing significant upward pressure on prices. U.S. oil inventories were also reported to have dropped, falling more than expected last week [see also 4 ETFs On Fire From The Heat Wave].
Below we outline one ETF that has been impacted by today’s major headlines:
Barclays iPath Dow Jones-UBS Coffee ETN (JO)
This ETF got a nice boost today as arabica coffee futures extended their rally, hitting its four-month high at $1.922 a pound. Prices have gradually increased in recent weeks, as concerns continue to grow over the effects of damaging rain on top-producer Brazil’s arabica coffee crop. With supply levels in question, JO gapped significantly higher at open and is currently up 1.71% (as of 11:48 AM July 11, 2012) [see also Four Little Known Factors Driving The Price Of Coffee].
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Disclosure: No positions at time of writing.