U.S. equity markets continued their rally today, bolstered yet again by revived hopes for central bankers to take action in stabilizing the financial markets. Despite rising concerns over Spain’s and Italy’s debt crisis, stocks firmly held their ground amidst looming uncertainties; the Dow Jones Industrial Average gained 93 points or 0.7%, while the S&P 500 inched 0.9% higher and Nasdaq came out on top with a 1.1% increase. Although U.S. equities ended on a positive note this week, investors will be keeping a close eye on the elections in Greece this weekend as the outcome will likely have a major impact on the market [see also Seven Simple & Cheap ETF Model Portfolio].
And for the second day in a row, stocks seemingly dismissed poor U.S. economic data, rallying on the hopes of the Fed implementing the next round of stimulus packages. The University of Michigan Consumer Confidence Survey came in worse than expected, showing how Americans felt less than cheery about the economy in May. Additionally, New York manufacturing activity is also showing signs of a major slowdown, while U.S. industrial production was reported to have declined in May [see ETF Technical Trading FAQ].
The iShares FTSE China 25 Index Fund (FXI) was one of the best performers, gaining 2.10% on the day. This ETF gapped higher at the open, only to inch its way even higher throughout the day. Asian markets ended the week on a positive note, propelling this ETF upwards during Wall Street hours [see our Asia-Centric ETFdb Portfolio].
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) was one of the worst performers yet again, shedding 4.35% on the day. Stocks continue to be fueled by optimism for the next round of Fed stimulus, helping to ease uncertainties from earlier this week. Despite today’s drop, the Volatility Index (VIX) remains slightly above the 20 mark, which suggests that uncertainty levels remain elevated [see The Compelling (And Simple) Case For Low Volatility ETFs].
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Disclosure: No positions at time of writing.