While Washington’s budget talk session ended in a stalemate, Wall Street charged ahead with equities rallying on upbeat economic data. According to the Institute for Supply Management’s manufacturing purchasing managers’ index reading, the U.S. factory sector expanded at a faster pace last month, exceeding analysts’ exceptions for a slight slowdown. The Thomson-Reuters and University of Michigan’s consumer-sentiment index also rose, showing that U.S. consumers felt better about the economy last month. Meanwhile in Washington, President Obama said that the automatic round of $85 billion in budget cuts would move ahead after no progress was made in talks between the White House and Republicans [see Free Member Report: How To Pick The Right ETF Every Time].
Global Market Overview: Stocks Shrugg Off Sequester
Following several better-than-expected economic reports, all three major U.S. equity indexes managed to close in positive territory today. The Dow Jones Industrial Average ETF (DIA, B) logged in a 0.33% gain, as its underlying index rallied to less than 100 points away from its record high. The S&P 500 ETF (SPY, A) rose 0.33%, while the tech-heavy Nasdaq ETF (QQQ, A-) gained 0.42%.
In Europe, equities were broadly lower after the euro zone unemployment rate rose to a record level and a report showed that manufacturing activity in the region continued to contract in February. Asian equities were also lower on disappointing economic data, as reports showed that Chinese manufacturing PMI came in slightly lower. China’s Shanghai Composite Index fell 0.3%, while Japan’s Nikkei Stock Average bucked the trend and rose 0.4% on a weaker yen.
Bond ETF Roundup
U.S. Treasury prices rose once again today as traders weighed the impact of $85 billion in automatic spending cuts. Yields on 10-year notes and 30-year bonds fell 2 basis points, while 5-year note yields fell 1 basis point [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures fell to their lowest settlement of the year today as disappointing Chinese and euro zone economic data weighed heavily on the commodity; copper futures also fell on this data, hitting its three-month low. Gold also traded lower today, posting its third straight weekly decline.
ETF Chart Of The Day #1: (DXJ)
The Japan Hedged Equity Fund (DXJ, A+) was one of the best performers today, gaining 1.78% during the session. After Japanese real-estate stocks lifted the Nikkei and the yen fell, this currency-hedge ETF rallied during the morning hours. DXJ inched higher throughout the session, eventually settling at $41.67 a share [see Asia-Centric ETFdb Portfolio].
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ETF Chart Of The Day #2: (IHI)
The Dow Jones U.S. Medical Devises Index Fund (IHI, B-) also posted a solid performance today, gaining 1.12% during the session. As worries about a federal probe into Intuitive Surgical (ISRG) receded, this ETF jumped during the morning hours. Though trading volumes remained thin, IHI inched slightly higher, eventually settling at $74.85 a share [see Baby Boomers ETFdb Portfolio].
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ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing 1-year period has been the 2012 ETFdb Portfolio, which has gained 9.78%.
Disclosure: No positions at time of writing.
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