Following yesterday’s steep losses, U.S. markets took another hit today after the Federal Reserve reiterated its economic concerns during the FOMC meeting. The Fed also announced that it will keep interest rates at “exceptionally low” levels, and that it will continue buying $40 billion in mortgage-backed securities each month in an effort to prop up the frail economy. Bernanke’s grim outlook had investors pushing stocks into negative territory, despite U.S. home prices being reported to have risen for the seventh straight month and newly built homes rising to the highest level in more than two years in the month of August [see Free Report: How To Pick The Right ETF Every Time].Global Market Overview: Fed Reiterates Grim Economic Outlook
The S&P 500 (SPY) came in at the bottom of the barrel, shedding 0.31% during the session. The Dow Jones Industrial Average (DIA) and tech-heavy Nasdaq (QQQ) also ended in negative territory, sliding 0.19% and 0.29%, respectively. In Europe, stocks were mostly higher as strong earnings and positive China PMI data boosted shares. Although Chinese manufacturing output came in at a three-month high, Asian equities were mixed; China’s Shanghai Composite ended 0.1% higher, while Japan’s Nikkei Stock Average snapped its 7-day winning streak, falling 0.7%.
Bond ETF Roundup
With no major changes announced in today’s FOMC meeting, demand for U.S. Treasuries fell, pushing 10-year yields up to 1.773%. Short-term bills, however, were able to limit some of their losses.
Commodity ETF Roundup
Cocoa futures dominated the headlines today, as reports of good production in several African nations sent the sweet commodity tumbling 4% lower. Other commodities were mixed as investors digested disappointing news in Europe and a positive report on China’s manufacturing sector; prices for gold, industrial metals, oil, natural gas and corn fell, while wheat and soybeans rose.ETF Chart Of The Day #1: SOCL
The Global X Social Media Index ETF (SOCL) finally caught some steam today, gaining 2.30% during the session. Facebook shares surged today after the social networking giant posted better-than-expected third-quarter earnings and revenues. In response, this beaten down ETF gapped significantly higher at the open, but slid sideways for the rest of the day. SOCL eventually settled well below its high of $13.27 a share [see also High Tech ETFdb Portfolio].EWH
The iShares MSCI Hong Kong Index Fund (EWH) was on of the best performers, gaining 2.07% during the session. As China’s manufacturing output came out better-than-expected, this ETF gapped significantly higher at the open. EWH slid sideways for the rest of the day, eventually settling at $18.72 a share [see also 3 China ETFs Not Dominated By Banks].
There are only two ETFs that currently offer exposure to cocoa futures: the iPath Dow Jones-AIG Cocoa Total Return Sub-Index ETN (NIB) and the iPath Pure Beta Cocoa Fund (CHOC). NIB is currently up 14.30% year-to-date, while CHOC has only gained 8.66%.
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Disclosure: No positions at time of writing.