ETF Trading Report: Sugar, Netherlands ETFs in Focus

Zacks

American stocks had another range-bound session as a lack of data and few earnings reports kept many investors on the sidelines. With this backdrop, the Dow fell by 10 points on the day, while the Nasdaq and the S&P 500 both finished in the green, adding, respectively, seven points and one point in Thursday trading.

From a sector perspective, the day was very mixed overall although some names in the tech and basic materials space were the top performers. Meanwhile, on the downside, services—especially in the credit market—along with some consumer firms, led the way, although losses weren’t that bad overall in these segments (see Two ETFs That Have Surged from Their Lows).

The American dollar was also flat in forex trading, moving higher against the euro and pound, but falling against the yen. Rates also continued to tick up, with the American 10 year hitting the 1.7% mark and the UK Treasury bond coming up strong in the yield department at a 1.62% rate.

Still, commodities rose again in Thursday trading, as oil and metals were both in the green. Beyond this, grains were also winners in Thursday trading, although some softs, like orange juice, coffee, and sugar, finished the day in the red (watch Preferred Stock ETFs Explained).

ETF trading continued to be extremely light on Thursday with many products seeing volume that is 50% of normal levels while a few popular commodity funds saw trading activity that was less than 33% of a normal trading day. Still, a few ETFs still managed to see outsized trading levels in Thursday, although these funds were certainly few and far between.

One ETP in particular that saw an outsized trading day was the iPath DJ-UBS Sugar TR Sub-Index ETN (SGG). This note usually does about 11,000 shares of volume in a normal day but saw just over 26,500 shares move hands in Thursday trading (see Beyond Corn: Three Commodity ETFs Surging this Summer).

This came as sugar continued its recent bearish run and finished the day down another 1.2%, pushing its five day loss to 7.2%. This move, along with some other recent negative activity, has pushed SGG close to its late June levels, erasing much of its gains for longer term investors. Possibly, some are betting on this bearish momentum continuing in this note, although the current Zacks ETF Rank of 1 or Strong Buy could suggest some outperformance in the coming months.

Another ETF that saw a great deal of volume in Thursday trading was the iShares MSCI Netherlands Investable Market Index Fund (EWN). This product usually sees about 71,000 shares change hands in a normal day but saw a spike to 544,000 shares in Thursday’s session (see Beyond Germany: Three European ETFs Tracking Strong Countries).

This volume increase was especially peculiar as many other European funds did not see a similar level of trading on the day. Furthermore, EWN only added about 0.2% on the session, so it seems unlikely that the fund was in focus for that reason.

However, it should be noted that the product appears to be on the verge of breaking out of its recent channel from a technical perspective. This potentially positive technical trend could be driving some of the recent interest in the Netherlands ETF.

(see more in the Zacks ETF Center)

Read the analyst report on EWN

Read the analyst report on SGG

Zacks Investment Research


 
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