Wall Street started off the week on a sour note after a volatile U.S. Treasuries trading session sparked a sell-off in equity markets. Investors also paid close attention to commentary from Fed officials; Dallas Fed President Richard Fisher stated his support of the central bank tapering its bond-buying program, but emphasized the need for the scale back to be a gradual process. Minneapolis Fed President Narayana Kocherlakota also voiced his support of the fed, urging investors that the central bank has not become more hawkish [see The Cheapest ETF for Every Investment Objective].
After high yielding sectors lagged amid Treasury concerns, all three major U.S. equity indexes tumbled to close in negative territory. The Dow Jones Industrial Average ETF (DIA, B) shed 0.9% after its underlying index tumbled 139.84 points. The S&P 500 ETF (SPY, A) fell 1.26%, while the tech-heavy Nasdaq ETF (QQQ, A-) lost 0.99%.
In Europe, markets also took a sharp cut in returns; the Stoxx Europe 600 slumped 1.56%. Meanwhile, Japan’s Nikkei Stock Average fell 2.70%, while China’s Shanghai Composite slipped 2.62% after a massive sell-off amid fears that the Chinese national bank is not up to easing an oncoming liquidity crisis.
Bond ETF Roundup
U.S. Treasuries managed to erase earlier losses after investors digested today’s Fed officials’ commentary. Yields on 10-year notes fell 0.5 basis points to 2.531% after rising as high as 2.661%, while 30-year bonds and 5-year note yields fell 3 and 0.5 basis points, respectively [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures erased earlier losses to settle just above $95 a barrel after the commodity initially sold off on concerns about China’s credit crunch. In other energy trading, natural gas and gasoline futures traded lower. Meanwhile, gold futures also settled lower due to investor concerns over China’s credit crunch.
ETF Chart Of The Day #1: (XLF)
The Financial Select Sector SPDR was one of the worst performers today, shedding 1.41% during the session. Financial shares were among today’s worst performers, forcing this ETF to gap significantly lower at the open. XLF slid sideways for the remainder of the session, eventually settling at $18.82 a share [see Financials Free ETFdb Portfolio].
ETF Chart Of The Day #2: (HAO)
The China Small Cap ETF (HAO, A) also posted a poor performance today, shedding 3.42% during the session. Chinese equities took a steep tumble today on central bank fears, forcing this ETF to gap significantly lower at the open. HAO slid sideways for the remainder of the day, eventually settling at $21.43 a share [see Asia-Centric ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing retirement strategy over the trailing 3-year period has been the 30 Years Til Retirement Portfolio, which has gained 42.63%.
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Disclosure: No positions at time of writing.