U.S. equities closed higher once again today, as investors weighed today’s GDP report against the possibility of the Fed scaling back its bond buying program. According to the Commerce Department, the U.S. economy grew by 1.8% during the first quarter of 2013, revised downward from the previous reading of 2.4%. The underwhelming report had investors thinking the central bank will delay tapering even further, since the Fed has emphasized the need for a healthy economy and labor market before any monetary policy changes can be made [see The Cheapest ETF for Every Investment Objective].Global Market Overview: XLV Rallies, PBW Pops On Obama’s Energy Plans
As Fed tapering fears eased, all three major U.S. equity indexes rallied to close in positive territory. The Dow Jones Industrial Average ETF (DIA, B) jumped 1.01% after its underlying index rallied nearly 150 points. The S&P 500 ETF (SPY, A) rose 0.99%, while the tech-heavy Nasdaq ETF (QQQ, A-) gained 0.87%.
In Europe, markets were broadly higher after ECB President Draghi emphasized that the central bank will remain accommodative for the foreseeable future; the Stoxx Europe 600 rallied 2.0%. Meanwhile, Japan’s Nikkei Stock Average fell 1.04%, while China’s Shanghai Composite shed 0.41%, inching closer to bear market territory.
Bond ETF Roundup
U.S. Treasuries snapped their losing streak, rallying for the first time in eight sessions on worse-than-expected GDP data. Yields on 10-year notes fell 7 basis points, while 30-year bonds and 5-year note yields fell 4.5 and 7 basis points, respectively [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures traded slightly higher today, settling at $95 a barrel, after the U.S. Energy Information Administration reported that U.S. crude supplies were unchanged for the week ended June 21. In other energy trading, gasoline futures fell on higher reported supplies. Meanwhile, gold futures tumbled 4.0% to settle at $1.229.80; silver and platinum also posted steep declines.
ETF Chart Of The Day #1: (PBW)
The WilderHill Clean Energy Portfolio (IYR, A) was one of the best performers today, gaining 2.15% during the session. In yesterday’s speech, President Obama introduced his new climate change strategy, which pushes for clean energy alternatives. As a result, this ETF gapped significantly higher at the open. PBW inched higher throughout the day, eventually settling at $5.22 a share [see Energy Bull ETFdb Portfolio].
ETF Chart Of The Day #2: (XLV)
The Health Care Select Sector SPDR ETF (XLV, A+) also posted a strong performance today, gaining 1.44% during the session. Health care shares were among today’s top performers, allowing this ETF to gap higher at the open. XLV inched higher throughout the day, eventually settling at $47.81 a share [see Baby Boomers ETFdb Portfolio].
ETF Fun Fact Of The Day
The best-performing themed strategy over the trailing 1-year period has been the Kitchen Sink ETFdb Portfolio, which has gained 9.70%.
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Disclosure: No positions at time of writing.