U.S. equities took a turn for the worse today, as investors kept a close eye on rising Treasury yields and weighed the impacts of the Fed potentially scaling back its massive bond buying program. In corporate news, student loan giant Sallie Mae has announced it will be splitting its operations, with the consumer banking leaving the core education-loan management group; a decision widely believed to increase the value of Sallie Mae. In a separate report, the SEC has finally set a $10 million fine on Nasdaq OMX Group for its “poor systems and decision making” during Facebook’s IPO a year ago, which caused an estimated $500 million in losses. Meanwhile, traders are keeping a close on eye on tomorrow’s weekly jobless claims and the first quarter GDP reports [see The Cheapest ETF for Every Investment Objective].
Global Market Overview: SDY Slumps Alongside High-Yield Sectors, GDX Rips Higher
As Fed stimulus worries intensified, all three major U.S. equity indexes fell to close in negative territory. The Dow Jones Industrial Average ETF (DIA, A-) slipped 0.68% after its underlying index tumbled over 100 points. The S&P 500 ETF (SPY, A) fell 0.65%, while the tech-heavy Nasdaq ETF (QQQ, A) shed 0.47%.
In Europe, markets were sharply lower after disappointing German labor data and a troubling eurozone economic forecast from OECD hit the streets; the Stoxx Europe 600 tumbled 1.9%. Meanwhile, Asian markets were slightly higher: both Japan’s Nikkei Stock Average and China’s Shanghai Composite Index inched 0.1% higher.
Bond ETF Roundup
U.S. Treasury prices rebounded, recovering some losses form yesterday’s steep sell off, following an encouraging 5-year note auction. Yields on 10-year notes fell five basis points, while 30-year bond and 5-year note yields fell six and 2.5 basis points, respectively [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures traded lower today, settling below $94 a barrel, as investors weighed the OECD’s troubling global growth forecast and the IMF’s estimate cut for China’s growth. In other energy news, natural gas and gasoline futures also traded lower. Meanwhile, gold rose above $1,390 on a weaker dollar.
ETF Chart Of The Day #1: (SDY)
The SPDR S&P Dividend ETF (SDY, B) was one of the worst performers today, shedding 1.33% during the session. Dividend-focused funds and other high yielding securities were among today’s worst performers, forcing this ETF to tumble during the first hour of trading. SDY slid sideways for the remainder of the day, eventually settling at $68.35 a share [see 8% Yield ETFdb Portfolio].
ETF Chart Of The Day #2: (GDX)
The Market Vectors TR Gold Miners ETF (GDX, B+) was one of the best performers today, gaining 4.70% during the session. As mining stocks rebounded, this ETF gapped slightly higher at the open. GDX rallied throughout the day, eventually settling at $28.20 a share [see Mining Boom ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing one-month period has been the High Tech ETFdb Portfolio, which has gained 5.19%.
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Disclosure: No positions at time of writing.