Daily ETF Roundup: VXX Up On Market Uncertainty, UNG Reels On High Stockpiles

by on November 14, 2011 | ETFs Mentioned:

Markets opened the week on a low note as investors were not only fearful of the European debt crisis, but also of the deadlines for our own deficit issues,which are drawing near. The day saw the Dow surrender 74 points while the S&P brought in the worst performance by losing close to 1%. With an uncertain outlook and shaky economy, oil saw its price fall to just above $98 per barrel as future demand remains in question amid a hazy future. While poor equities days typically see gold rise, today saw the precious metal drop by about 0.5% as the euro displayed weakness yet again [see also Beyond UNG: Three Intruiging ETFs To Play Natural Gas].

Though today had no major news breaks, the week ahead will certainly be chalk-full of important data that will have significant impact on markets. A number of European nations will report both GDP and CPI results this week, which will have major implications in how the region moves forward economically. On top of all of this, the U.S. congressional committee has just ten days to find a solution to our budget deficit issues. They are currently trying to decide on a massive $1.2 trillion in deficit reduction, though many are calling for more, as this figure barely puts a scratch in the massive amount we racked up over the years. With markets bracing for an active week, we outline two of the most notable ETF performances on the day [see also ETF Insider: Expect More Volatility].

One of the best ETF performers on the day came from the S&P 500 VIX Short-Term Futures ETN (VXX) which tacked on 2.5% during today’s trading. While markets faltered on the uncertainty in both the U.S. and Europe, VXX prayed on the sell off as the VIX shot up on the day. For those looking to make a leveraged play on volatility, TVIX features a 2X exposure to VIX futures and saw its price appreciate by just over 5% on the day. Though both are extremely dangerous investments, for those who have a strong feeling on the economy, these two speculative instruments can be very powerful in the right hands [see also Low Volatility ETFdb Portfolio Now Available].


On the other side of the equation, one of the worst performing funds was the United States Natural Gas Fund LP (UNG). This product, which tracks front month natural gas futures, saw its volume increase nearly twofold today as roughly 15.5 million shares changed hands through out the course of the day. UNG chalked up losses of 3.4% as the fund is still reeling from Thursday’s EIA supply report coupled with a shaky demand outlook. Stockpiles rose by 37 billion cubic feet compared to the expected 31-35 bcf gain as supply has been far stronger than demand. UNG is down over 31% on the year [see also HOLDRS Conversion Begins: Investor Action Required].


Disclosure: No positions at time of writing.