Daily ETF Roundup: Fed Hints At Future Taper, XLU And IBB Tumble

by on June 19, 2013 | ETFs Mentioned:

U.S. equities slid into the red today as investors digested the highly anticipated FOMC press conference. Contrary to expectations, the Fed announced that it will continue its $85-billion a month bond-buying program for now, though Bernanke indicated that tapering could begin later in the year. The central bank did, however, give a rather optimistic outlook on the U.S. economy, noting improving labor market conditions and higher GDP growth expectations for 2014 [see The Cheapest ETF for Every Investment Objective].

Global Market Overview: Fed Hints At Future Taper, XLU And IBB Tumble6-19

Following today’s Fed policy statement, all three major U.S. equity indexes fell to close in negative territory. The Dow Jones Industrial Average ETF (DIA, B) dropped 1.25%, after its underlying index tumbled 206.04 points to wipe out most of its gains form the previous two sessions. The S&P 500 ETF (SPY, A) fell 1.33%, while the tech-heavy Nasdaq ETF (QQQ, B+) lost 1.22%.

In Europe, markets were mostly lower ahead of the Fed’s press conference; the Stoxx Europe 600 slipped 0.23%. Meanwhile, Japan’s Nikkei Stock Average soared 1.83% to a one-week high, while China’s Shanghai Composite slipped 0.73%.

Bond ETF Roundup

U.S. Treasuries sold off today following Bernanke’s commentary. Yields on 10-year notes rose 15 basis points, while 30-year bonds and 5-year note yields rose 6 and 18 basis points, respectively [see also Seven Simple & Cheap ETF Model Portfolios].

Commodity Roundup

Crude oil futures traded lower today, settling just above $98 a barrel, after the U.S. Energy Information Administration reported supplies rising by 300,000 barrels in the week ended June 14. In other energy trading, natural gas and gasoline futures were slightly higher. Meanwhile, gold futures erased some of their earlier gains to settle at $1,374 an ounce.

ETF Chart Of The Day #1: (XLU)

The Utilities Select Sector SPDR ETF (XLU, A) was one of the worst performers today, shedding 2.29% during the session. Following the Fed statement, utilities shares tumbled, forcing this ETF to free fall during the afternoon hours. XLU settled at $37.50 a share [see Futures Free Commodity ETFdb Portfolio].

Click To Enlarge

Click To Enlarge


ETF Chart Of The Day #2: (IBB)

The Nasdaq Biotechnology Index Fund (IBB, A-) also posted a weak performance today, shedding 2.00% during the session. This ETF traded in a narrow range earlier in the session, but then tumbled alongside healthcare shares at the end of the trading day, eventually settling at $173.02 a share [see Baby Boomers ETFdb Portfolio].

Click To Enlarge

Click To Enlarge


ETF Fun Fact Of The Day

The best-performing regional strategy over the trailing 1-year period has been the Euro Free Europe Portfolio, which has gained 22.01%.

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Disclosure: No positions at time of writing.