Euphoria levels dropped off during the second day of trading in the new year as cautious commentary from the latest Fed minutes sent a wave of worry across Wall Street. Following Wednesday’s ferocious rally, profit taking pressures were quick to sweep in after the Federal Reserve said it plans to end its monthly bond-repurchase program sometime in 2013. Mixed economic news on the day only added to the clouds of uncertainty; the latest ADP employment report was upbeat, although weekly jobless claims came in higher-than-expected [Download Seven Simple & Cheap ETF Model Portfolios].
Markets took cues from the Fed’s cautious outlook, which served as a warning sign that ongoing stimulus efforts could soon come to an end. Selling pressures hit the Nasdaq ETF (QQQ, B+) the hardest, while the Dow Jones Industrial Average ETF (DIA, A-) proved most resilient on the day.
On the international front, profit taking pressures also ensued and the European ETF (VGK, A) tallied a 1.17% loss on the day; the SPDR China ETF (GXC, A) turned in the best performance, although it too ended the session in negative territory.
Bond ETF Roundup
The fixed income space wasn’t immune to profit taking pressures as made apparent by negative performances across the board; safe haven Treasuries fell the hardest while high-yield debt securities surprisingly held their ground amid the broad sell-off.
Commodity ETF Roundup
The U.S. Dollar Index gained nearly 1% on the day which didn’t resonate too well in the commodity space as futures prices slumped lower across the board. The metals group led the way lower with silver plunging upwards of 2%, while natural gas extended its losses and shed another 1.64% on the day.
ETF Chart Of The Day #1: (PBW)
The PowerShares WilderHill Clean Energy Portfolio (PBW, B-) was one of the best performers, gaining an impressive 3.53% during an otherwise lackluster day on Wall Street. With no fundamental news taking place in the alternative energy sector, it’s fair to say that today’s price action was purely bargain buying [see Energy Bull ETFdb Portfolio].
ETF Chart Of The Day #2: (GDX)
The Van Eck Market Vectors Gold Miners (GDX, B+) was one of the worst performers, shedding 4.16% on the day. Gold futures slipped lower settling just shy of the $1,660 an ounce level, dragging down mining equities along the way. Selling pressures in GDX accelerated in the afternoon, although the ETF ultimately ended the sessions with high-volume buying [see GLD-Free Gold Bug ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing Regional strategy over the past 13 weeks has been the Ex-U.S. ETFdb Portfolio, which has gained just over 6%.
Disclosure: No positions at time of writing.