ETF Trading Report: Emerging Market, Industrial ETFs In Focus

Zacks

American stocks once again finished the day in the red as all the major benchmarks slumped during Thursday’s session. The Dow ended lower by about 0.25% while the broader indexes had worse days as the S&P 500 declined by 0.5% and the Nasdaq lost about 0.8%.

In terms of sector performances, tech and financials were both leading the way on the downside while basic materials and industrial conglomerates also had rough days. On the upside, however, staples did quite well, led by a 3.8% move higher in PG and a 4.1% surge in pharma giant Merck (MRK).

Thanks to this market weakness, the dollar index added a few basis points on the day, rising to $83.61 as the euro tested the $1.22 mark. Meanwhile, in Treasury bonds, the 10 year saw yields decline below the 1.50% mark while the 30 year was trading with a yield of just 2.56% in comparison.

Commodities did have a solid day despite the stronger dollar, as all energy products—with the exception of WTI crude—were in the green, although metals did broadly trend lower. Agricultural commodities were again volatile as cocoa slumped by 4.5% in U.S. trading while corn added 4% and wheat jumped by 2.5% (watch Exploring EFs: Zacks ETF Rank).

In ETF trading, volume was surprisingly robust across the board as many products traded in line with their historical volume averages. Investors saw especially solid volume in the commodity market as well as in some of the short-leverage funds, while a few of the mining ETFs also were active during Thursday’s volatile session.

One ETF that was especially in focus was the ProShares UltraShort MSCI Emerging Markets Index Fund (EEV). This -2x fund which rebalances on a daily basis usually does about 377,000 shares in volume per day but saw a spike to 1.6 million shares during Thursday’s session (read Three Overlooked Emerging Market ETFs).

This volume was pretty well spread out but investors did see a few block trades during the session including one of over 150,000 shares. It also resulted in a positive day for EEV as the fund added more than 3.3% as speculation over an emerging market slowdown continues to build, pushing more investors into inverse products like this popular one from ProShares.

Another fund that saw outsized trading volumes was the ProShares UltraShort Industrials ETF (SIJ). This bear ETF usually traded just 6,900 shares a day but saw nearly five times as many shares move hands in Thursday’s session (see Three Industrial ETFs Outperforming XLI).

Interestingly, this bump in volume was also seen in the broad industrial space as well, as represented by XLI, the most popular ETF in the space. However, concerns over the health of the industrial side of the economy are mounting and SIJ was the place to be in this segment during Thursday’s session as the product added about 0.9% on the day.

(see more in the Zacks ETF Center)

Read the analyst report on EEV

Read the analyst report on SIJ

Read the analyst report on MRK

Read the analyst report on PG

Zacks Investment Research


 
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