Major equity indexes kicked off the week with an encouraging pop at the open following last week’s pullback, although looming uncertainties prevailed as stocks gave up gains as the trading session drew to a close. Given last week’s choppy trading, we anticipate that fiscal cliff woes will likely permeate headlines until a concrete solution (or lack thereof) is agreed upon by the end of the year. Overseas, Greek debt drama remains at the forefront as policymakers struggle to hammer out a deal, although many are anticipating that some sort of agreement will be reached in the coming days to avert an outright default [see also ETF Insider: Fiscal Cliff Woes Set Volatile Tone].
Global Market Overview: Flat Close On Fiscal Cliff Woes
The Nasdaq led the way lower as shares of Apple opened the day in green territory only to succumb to profit taking pressures and tally another session in red. The Dow Jones ETF (DIA) just barely beat out the S&P 500 ETF (SPY), gaining 0.09% and 0.08% respectively on the day. European markets were mixed as well after the weekend given political gridlock surrounding Greek debt deal talks. In Asia, Chinese stocks led the way higher after a surprisingly better-than-expected trade surplus report showed a healthy increase in exports for the nation [see also Free 7 Simple & Cheap ETF Portfolios].
Bond ETF Roundup
The fixed-income market largely took cues from the equity front throughout the day; securities on the investment-grade end of the credit quality spectrum traded higher, including Treasuries, TIPS, and corporate bonds. As expected, “riskier” debt notes took a bit of a hit on the day, with “junk bonds” leading the way lower.
Commodity ETF Roundup
A strengthening U.S. dollar on the day kept a lid on most commodity prices; copper futures posted a solid gain in the metals market as encouraging Chinese export data paved the way higher for this industrial metal. Natural gas futures also bucked the trend as cooler weather forecasts for this week painted a bullish outlook for demand.
ETF Chart Of The Day #1: XLV
The State Street Health Care Select Sector SPDR (XLV) was one of the best performers, gaining 0.51% on the day. Health care was the best performing sector on the day as investors flocked to this safe haven in light of looming fiscal cliff woes plaguing virtually every other corner of the market. The utilities sector, also regarded as a safe haven, on the other hand was slaughtered as potential dividend tax-rate hikes spooked many income-investors sitting on profits [see our Baby Boomers ETFdb Portfolio].
Click to Enlarge
ETF Chart Of The Day #2: AMJ
The JPMorgan Alerian MLP Index ETN (AMJ) was one of the worst performers, shedding 2.19% on the day. After enduring a pullback last week, bearish pressures persisted and sunk this ETN below its 200-day moving average, potentially marking the beginning of a much steeper correction. AMJ saw no relief throughout the day as shares slid lower from the opening bell right up to the last transaction on the day, settling beneath support at the $38 level [see our Energy Bull ETFdb Portfolio].
Click to Enlarge
ETF Fun Fact Of The Day
The best performing themed strategy in the trailing 13-week period is our GLD-Free Gold Bug ETFdb Portfolio; this strategy is up an impressive 8.78%.
Disclosure: No positions at time of writing.
- The Most Successful ETFs Of All-Time
- ETF Insider: Markets At Fed’s Mercy
- All Better Now? Many ETFs Climb Back Near Pre-Recession Levels
- Daily ETF Roundup: Stocks Sink, Greece Cuts A Deal
- ETF Daily Roundup: Markets Rally Prior To Election Results