Daily ETF Roundup: Sour Jobs Data Sparks Fed Hopes

by on September 7, 2012 | ETFs Mentioned:

Euphoria in this type of market is obviously a short-lived phenomenon, as sour U.S. labor data practically derailed yesterday’s onslaught of bullish momentum. Markets zigzagged in a tight range throughout the day after the Labor Department announced that non-farm payrolls gained only 96,000 in August, coming in much lower than expected. Unemployment however, declined 20 basis points to 8.1%, but the drop was largely attributed to more people giving up on their relentless hunt for work. But of course, investors managed to turn this disappointing report into something positive, evoking once again a sense of optimism and quasi-euphoria. Many now believe that today’s blaring red flag will force the Fed to unveil further stimulus measures to help bolster our nation’s road to economic recovery. Whether or not this may be true, markets somehow adopted this theory, pushing equities slightly higher [see the Truth About Leveraged ETFs].

Global Market Overview: Sour Jobs Data Sparks Fed Hopes

Despite today’s rough trading session, all three major indexes posted sharp gains for the week, closing at multi-year highs. The Dow Jones Industrial Average (DIA) tacked on 14.64 points or 0.1% to  13306.64, its highest close since December of 2007. Led by strong performances in materials stocks, the S&P 500 (SPY) gained 5.8%, reaching its highest level since January of 2008.  The Nasdaq (QQQ) ticked up a mere 0.61 points, less than 0.1%. European equities closed broadly higher with the Stoxx Europe 600 reaching a 14-month high during intraday trading before pulling back. In Asia, markets surged after Beijing approved more infrastructure projects to boost economic growth; China’s Shanghai Composite jumped 3.7%, while Japan’s Nikkei Stock Average gained 2.2%.

Bond ETF Roundup 

Today’s weaker-than-expected jobs report sparked a rally in U.S. Treasuries as investors anticipated the Fed implementing further stimulus measures in the future. The rally quickly lost steam however as concerns over inflation put downward pressure on prices.

Commodity ETF Roundup

The grim U.S. jobs report pushed gold up 2% for the second time in two weeks as investors flocked to their favorite safe haven asset. Gold hit its sixth month high, nearing $1,740. Silver, platinum, and copper also rose during the session on building speculation that the Fed will take additional action to help the struggling economy.

ETF Chart Of The Day #1: FXI

The iShares FTSE China 25 Index Fund (FXI) delivered a strong performance today, gaining 2.84% during the session. Today, China approved 60 infrastructure projects worth more than $150 billion in an effort to bolster economic growth. In response, this ETF gapped significantly higher at the open, but slid sideways for the rest of the trading session. Stabilized by an Asian equities rally, FXI eventually settled below its high of $33.76 a share [see also Asia-Centric ETFdb Portfolio].

ETF Chart Of The Day #2: XME

The State Street SPDR S&P Metals & Mining ETF (XME) was one of the best performers of the day, gaining a whopping 5.12% during the session. Alongside today’s rally in precious and industrial metals, this ETF gapped significantly higher at the open. XME pushed higher throughout the day, eventually settling below its high of $44.08 a share [see also What Are The Most Popular Commodity ETFs?].

ETF Fun Fact Of The Day

Only four ETFs offer indirect exposure to Kazakhstan (a country for which there is no specific ETF for) with the Frontier Markets ETF (FRN) making the biggest allocation towards it of about 6%.

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Disclosure: No positions at time of writing.