U.S. equities were in for a wild ride today, as investors digested the Bank of Japan’s latest monetary policy decision. The BOJ announced that it will keep its key interest rate and asset-buying program unchanged, a sign that economic recovery may be picking up. Meanwhile, investors turned their attention to the start of the German Constitutional Court’s two-day hearing that will question the legality of the European Central Bank’s bond-buying program [see The Cheapest ETF for Every Investment Objective].Global Market Overview: VXX Spikes On BOJ Worries, KBE Slumps
After a choppy trading session, all three major U.S. equity indexes fell to close in negative territory. The Dow Jones Industrial Average ETF (DIA, B) shed 0.66%, after its underlying index fell more than 150 points near the open. The S&P 500 ETF (SPY, A) fell 1.03%, while the tech-heavy Nasdaq ETF (QQQ, A-) slipped 1.05%.
In Europe, markets were lower, with the Stoxx Europe 600 shedding 1.2%. Meanwhile, Asian equities tumbled following the Bank of Japan’s statements; Japan’s Nikkei Stock Average fell 1.45%, while China’s Shanghai Composite Index shed 1.39%.
Bond ETF Roundup
U.S. Treasury prices ended higher today, despite a weak government auction. Yields on 10-year notes fell 2.5 basis points, while 30-year bond yields fell 5 basis points and 3-year note yields rose 1 basis point [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures traded lower today, settling below $96 a barrel, following a disappointing monthly forecast from the Organization of the Petroleum Exporting Countries. In other energy trading, natural gas and gasoline futures were also lower. Meanwhile, gold traded lower on Bank of Japan stimulus worries.
ETF Chart Of The Day #1: (VXX)
The S&P 500 VIX Short-Term Futures ETN (VXX, B+) was one of the best performers today, gaining 6.60% during the session. As the CBOE Volatility Index (VIX) jumped above 17, this ETF gapped significantly higher at the open. VXX traded higher throughout the day, eventually settling at $20.02 a share [see Low Volatility Portfolio].
ETF Chart Of The Day #2: (KBE)
The SPDR S&P Bank ETF (KBE, A-) was one of the worst performers today, shedding 1.33% during the session. Bank shares were among today’s worst performers, forcing this ETF to gap significantly lower at the open. KBE slid sideways for the remainder of the day, eventually settling at $28.15 a share [see Financials Free ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing one-year period has been the Commodity Guru ETFdb Portfolio, which has gained 9.07%.
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Disclosure: No positions at time of writing.
- Bank of Japan