All eyes were on Ben Bernanke today, as the Fed Chairman delivered his commentary after the central bank’s latest policy announcement. As was expected, the Fed extended its bond-buying program in effort to boost the jobs and the economic recovery. Though the central bank stressed that they are by no means putting monetary policy on “auto-pilot”, they did set a 6.5% threshold for the unemployment rate. Bernanke also brought attention to the looming fiscal cliff, stating that it is already “clearly” affecting the economy. Putting pressure on Congress, he stated “I don’t think the Federal Reserve has tools to offset the effect… We’d have to temper the expectations of what we can accomplish” [see also 101 High Yielding ETFs For Every Dividend Investor].Global Market Overview: Stocks End Mixed After Bernanke’s Speech
U.S. equities were in for rather volatile day of trading, as Bernanke’s speech initially sparked a broad market rally. But as investors began to reassess the implications of Fed’s new asset purchases, stocks gave back their afternoon gains to close mixed on the day. The S&P 500 (SPY) manged to eke out a small gain of 0.04%, while Tech-heavy Nasdaq (QQQ) dropped 0.28% and the Dow Jones Industrial Average (DIA) slipped 0.02%. In Europe markets were broadly higher after Greece’s successful buyback. Asian equities also closed higher; Japan’s Nikkei Stock Average gained 0.6%, while the Hang Seng Index rallied 0.8%.
Bond ETF Roundup
U.S Treasury prices fell once again today after the central bank unveiled a new round of monetary stimulus. Yields on 10-year notes rose to 1.70%, while 30-year bond yields jumped from 2.84% to 2.89% and yields on 5-year notes inched slightly higher to 0.64%
Commodity ETF Roundup
Crude oil prices climbed today on news of more Fed stimulus, which overshadowed a decision by OPEC to leave its output targets at 30 million bpd. Gold and silver futures also rallied today, though gains were tapered off by the end of the session. In other commodities, wheat continued its decline after yesterday’s U.S. forecast of projected higher domestic supplies of the grain [see also Gold’s 12 Year Run May Finally Be Over].ETF Chart Of The Day #1: TBT
The ProShares UltraShort Barclays 20+ Year Treasury Fund (TBT, B) had an impressive performance today, gaining 2.36% during the session. Following the Fed’s announcement, prices on 30-year bonds dropped, forcing this -2x leveraged fund to rally during the press conference. TBT inched higher for the remainder of the session, eventually settling near its high of $62.40 a share [see also Weathering Economic Headwinds: ETFs To Prepare Like Bill Gross].
ETF Chart Of The Day #2: NUGT
The Direxion Daily Gold Miners Bull 3x Shares (NUGT, B) was one of the best performers of the day, gaining a whopping 8.38% during the session. Also following the Bernanke’s commentary, gold prices as well as gold miner equities skyrocketed. NUGT rallied for the majority of the day, slipping only during the final hour of trading. The leveraged fund eventually settled at $11.64 a share [see also GLD-Free Gold Bug ETFdb Portfolio].
ETF Fun Fact Of The Day
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Disclosure: No positions at time of writing.
- Ben Bernanke