Financial markets across the globe got off to a rocky start this week as news on the latest developments in the Cyprus saga hit the streets. The small island nation agreed to impose taxes on bank deposits of more than 100,000 euro in the country’s largest banks. Commentary from the head of Eurogroup reflected investors concerns: Jeroen Dijsselbloem stated that the bailout could serve as a blueprint for dealing with other euro zone bank rescues. Though Dijsselbloem quickly backtracked on his commentary, investors still remained understandably cautious [see Free Member Report: How To Pick The Right ETF Every Time].Global Market Overview: Stocks Slip On Cyprus Worries
Following news concerning the Cyprus saga, all three major U.S. equity indexes fell to close in negative territory. The Dow Jones Industrial Average ETF (DIA, B) slipped 0.48%, after its underlying index hit a fresh intraday high earlier in the session. The S&P 500 ETF (SPY, A) lost 0.42%, while the tech-heavy Nasdaq ETF (QQQ, A-) fell 0.36%.
In Europe, closed markets broadly lower on Cyprus worries; bank and financial shares were hit hardest. Meanwhile, Asian markets were mixed. China’s Shanghai Composite Index lost 0.07%, while Japan’s Nikkei Stock Average rose 1.69% on initial news of Cyprus’ last minute deal.
Bond ETF Roundup
U.S. Treasury prices were slightly higher as bond traders digested Eurogroup President Jeroen Dijsselbloem’s commentary. Yields on 5 and 10-year notes as well as 30-year bonds fell 1 basis point [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures settled at their highest level in over a month as commodity traders hope the Cyprus deal will help stabilize European demand. Prices for natural gas futures, however, were lower. Meanwhile, gold futures pared losses as the euro weakened and equity markets pared gains.
ETF Chart Of The Day #1: (EUFN)
The MSCI Europe Financials Sector Index Fund (EUFN, B) was one of the worst performers today, shedding 3.30% during the session. European bank shares were among today’s worst performers following the latest Cyprus news, forcing this ETF to gap significantly lower at the open. EUFN inched lower for the rest day, eventually settling at $19.37 a share [see Euro Free Europe Portfolio].
ETF Chart Of The Day #2: (EUO)
The UltraShort Euro Fund (SOXX, A-) was one of the best performers today, gaining 2.00% during the session. The euro took a steep tumble today, falling to its lowest level since mid-November, forcing this leveraged short ETF to gap slightly higher at the open. EUO pushed higher throughout the day, eventually settling at $19.90 a share [see Euro Free Europe Portfolio].
ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing 13-week period has been the Baby Boomers ETFdb Portfolio, which has gained 9.54%.
Disclosure: No positions at time of writing.
- Jeroen Dijsselbloem