Yesterday’s M&A-induced euphoria quickly faded after the minutes from the most recent FOMC meeting were released. The Fed announced that it will continue purchasing $85 billion a month of mortgage-backed and Treasury securities, as they feel the larger economic landscape still possesses several red flags. The minutes showed that policymakers remain divided on the central bank’s exit strategy, forcing Wall Street to take breather after all three major U.S. indexes closed at fresh multi-year highs [Be sure to check out the real estate news, trends, tips and tricks over at Dividend.com].
Following the release of the Fed minutes, all three major U.S. equity indexes fell to close in negative territory today. The S&P 500 ETF (SPY, A) tumbled 1.25%, as its underlying index posted its worst single-day drop in 2013. The Dow Jones Industrial Average ETF (DIA, A-) slipped 0.78%, while the tech-heavy Nasdaq ETF (QQQ, B+) fell 1.54%.
In Europe, markets were slightly lower after the Bank of England’s minutes indicated that several policymakers are pushing for additional stimulus. Asian equities, however, rallied after a report showed that Japan’s exports grew faster than expected and that there was a return to growth in exports in China. Japan’s Nikkei rose 0.8%, while China’s Shanghai Composite index inched 0.6% higher.
Bond ETF Roundup
U.S. Treasuries were in for seesaw day of trading following the Fed’s minutes release indicating additional bond purchases. Yields on 10-year notes fell 1 basis point, while 5-year note yields fell 2 basis points and 30-year bond yields remained flat at 3.2% [see also Seven Simple & Cheap ETF Model Portfolios].
With the exception of agriculture futures, commodities were mostly lower today. A rumor of a hedge fund liquidating its commodity positions sparked a broad sell-off in metals and oil, while looming concerns over global supply and demand put additional selling pressures on the market. Gold closed at a 6-month low (and below the coveted $1,600 level), silver fell the most in 2 months, copper hit its 1-month bottom, and RBOB gasoline and U.S. crude both fell more than 2% each.
ETF Chart Of The Day #1: (XLI)
The Industrial Select SPDR ETF (XLI, A) was one of the worst performers today, shedding 1.31% during the session. Material an industrial shares fell today, with Caterpillar (CAT) tumbling 2.49% after the company’s rolling three-month sales numbers in January fell 4%. As a result this ETF fell steeply throughout the day, eventually settling at $40.82 a share [see Kitchen Sink ETFdb Portfolio].
ETF Chart Of The Day #2: (IYW)
The Dow Jones U.S. Technology Index Fund (IYW, A-) also posted a weak performance today, shedding 1.72% during the session. Apple (AAPL) fell 2.42% after Foxconn Technology Group, which assembles several Apple products, said it was freezing hiring of assembly line workers. In response, this ETF fell lower throughout the day, eventually settling at $71.98 a share [see High Tech ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing retirement strategy over the trailing 13-week period has been the 30 Years Til Retirement Portfolio, which has gained 10.66%.
Disclosure: No positions at time of writing.