ETF Trading Report: Mid Cap, Insurance ETFs In Focus

Zacks

Markets sold off once more in Thursday trading thanks to more speculation on Greece’s future in the euro zone, while a weak Philly Fed didn’t help matters back in the U.S. either. Thanks to this, the S&P 500 slumped by about 1.5% to finish at a four month low while the Dow fell by 1.2% and the Nasdaq slipped 2.1% on the session.

Losses were pretty widespread throughout the market with most securities in the banking and tech segments slipping, led by a 4.3% loss in JPM and a 2.9% loss in Apple. Some similar moves lower were seen in the basic materials and consumer segments, while on the upside, only WMT and the telecom space showed any noticeable gains for the session.

Thanks to this continued weakness, the U.S. dollar continued to gain against the major currencies of the world and especially those in Europe as the euro/dollar rate fell below the 1.27 mark. Meanwhile, in Treasury bond trading, the ten year saw yields fall to just 1.70%, within striking distance of the 52 week low for the benchmark security.

Despite this flight to quality, commodities held up pretty well in Thursday trading. Investors did some weakness in oil products, however, while most softs and precious metals helped to balance this out. This was especially true in gold and silver as the two key precious metals rose by at least 2.4% for the session.

In the ETF trading world, many of the industry’s most popular products saw volume that was above average across the equity, fixed income, and commodity spaces. Of these segments, special interest was seen in the junk bond, U.S. sector, and short-leveraged ETFs which saw the bulk of the outsized trading volume on the day.

In particular, trading was especially robust in the mid cap ETF space as many products in this segment experienced huge trading days (read Mid Cap ETF Investing 101). While a number of these ETFs saw volume that was at least double the average, it was especially huge in the SPDR DJ Wilshire Mid Cap ETF (EMM).

This product usually sees about 5,600 shares change hands on a normal day but saw nearly 44,000 shares move hands in Thursday’s session. The vast majority of this trading came in the tail end of the session as the product didn’t even trade during a large portion of the day. Nevertheless, it was a very volatile, and negative, day for the space as EMM lost about 3.2% in the session.

Another ETF that saw a huge spike in volume in Thursday trading was the SPDR S&P Insurance ETF (KIE). This financial ETF usually sees trading that just breaks over the 105,000 share mark but experienced a spike to 611,000 shares during Thursday trading (read Insurance ETFs: No Rebound in 2012?).

Trading was pretty well spread out throughout the day although there were some decent sized blocks that changed hands around noon and a few more in the final hours of the day. Nevertheless, most of the volume was decidedly bearish as the product slid by about 1.8%, although this was a little less than many of the more banking focused products during today’s tumultuous session.

(see more in the Zacks ETF Center)

Read the analyst report on EMM

Read the analyst report on KIE

Zacks Investment Research


 
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