Yesterday, investors had mounting doubts about the prospect of more stimulus. Today however, was a quite different story. Apparently the Fed minutes released on Wednesday were not enough to convince Wall Street that the central bank is indeed ready to take further action to boost the rather anemic economic recovery. However, a letter from Bernanke to U.S. Rep. Darrell Issa (R., Calif.) seemingly did the trick to convince investors the Fed isn’t taking this matter lightly. In the letter, which was publicly released today, Bernanke vehemently defended the central banks’s actions, and emphasized that there is scope for the Fed to take further stimulus measures. Adding to investors’ sense of new-found euphoria, the Europe’s central bankers kicked it into high gear as they continued to hammer out the details on measures meant to save the debt-ridden region [see also The Ultimate Commodity Survival Kit: 5 Must-Haves].
Global Market Overview: Helicopter Ben And Hurricane Isaac
U.S. equities finished strong today, rallying to close near highs. Despite the uptick, all three major indexes failed to log gains for the week. The Dow Jones Industrial Average (DIA) snapped its six-week winning streak, but managed to come out on top with today with a 0.77% gain. The S&P 500 (SPY) and Nasdaq (QQQ) also posted modest gains on the day. Europe equities ended higher after a late bounce when a report was announced that the ECB is considering setting yield band targets. This action would prevent speculators from cashing in from the ECB’s new bond-buying program. In Asia, equities closed mostly lower as investor concerns about China’s bleak economic outlook overshadowed news from the U.S. and the Euro Zone.
Bond ETF Roundup
After several days of strong gains, U.S. Treasuries turned lower today after a news report made investors optimistic about the ECB making progress on its plan to combat the region’s debt crisis. Following the report, investors quickly shed their safe-haven holdings. This price swing solidified the notion that the ECB’s policies are a key driver for investors’ outlooks.
Commodity ETF Roundup
Natural gas futures plummeted today as yesterday’s better-than-expected supply report put downward pressure on the commodity. Weighing on the fossil fuel was weather reports on Tropical Storm Isaac; data suggests that the storm is strengthening into a hurricane, but it is now expected to head east of the major drilling areas in the Gulf of Mexico.
ETF Chart Of The Day #1: DGAZ
The VelocityShares 3x Inverse Natural Gas ETN (DGAZ) was one of the best performers, gaining a whopping 13.32% on the day. After a recent hot streak, natural gas futures took a nosedive today, forcing this leveraged ETF to gap slightly higher at the open. DGAZ continued its climb, surging upwards to settle just below its high of $31.30 a share [see also Bargain Shopping In Oil and Gas Stocks].
ETF Chart Of The Day #2: SOCL
The Global X Social Media Index ETF (SOCL) has certainly had a bumpy ride since the abysmal IPO of Facebook: in the last six months, the fund is down nearly 16%. Today however, SOCL finally got a much needed boost, gaining 0.72% on the day. SOCL peaked during mid-morning hours, but proceeded to slide sideways for the rest of the day, eventually settling below its high of $12.67 a share [see also High Tech ETFdb Portfolio].
ETF Fun Fact Of The Day
Only 6 ETFs offer indirect exposure to Ukraine (a country for which there is no specific ETF for) with the MSCI Emerging Markets Eastern Europe Index Fund (ESR) making the biggest allocation towards it of about 1.98%.
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Disclosure: No positions at time of writing.
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