As Wall Street continued its “breather” from last week’s strong run, stocks closed virtually unchanged in yet another lackluster trading session. Despite this, major U.S. equity indexes still managed to log in their second-straight weekly gain. In fourth quarter earnings news, bellwether Wells Fargo reported that the company’s net interest margin declined more than expected, spooking investors who now believe that low interest rates are taking a heavier toll on net margins. In economic news, the U.S. budget deficit for December totaled $260 million, while the nation’s trade gap widened, bucking economists’ expectations [see also Seven Simple & Cheap ETF Model Portfolios].
Global Market Overview: Japan Makes Bold Move
With yet another day of thin trading, only two major U.S. equity indexes managed to claw their way into positive territory. The Dow Jones Industrial Average (DIA, B) logged in a meager 0.13% gain, while tech-heavy Nasdaq (QQQ, A-) inched 0.13% higher. The S&P 500 (SPY, A) closed virtually unchanged. In Europe, markets were mostly lower despite a successful Italian bond auction. Asian markets were mixed following Japan’s announcement of its $116.02 billion emergency stimulus package and fear of rising Chinese inflation. China’s Shanghai Composite dropped 1.8%, while Japan’s Nikkei Stock Average surged 1.4%.
Bond ETF Roundup
U.S. Treasury prices rose today as bond traders kept their focus on Washington’s next crucial steps concerning spending cuts and the debt ceiling. Yields on 10-year notes and 30-year bonds fell 3 basis points, while 5-year yields slid 2 basis points. Investors remained wary ahead of Fed Chairman Ben Bernanke’s speech next week.
Commodities were mixed across the board today, as traders kept their focus on China’s worrying inflation number. Gold, silver, and copper all declined on fading hopes of China picking up the global economic recovery. RBOB gasoline and Brent futures also posted declines, while natural gas shot up 4.26%.
ETF Chart Of The Day #1: (FXY)
The Rydex CurrencyShares Japanese Yen Trust (FXY, B+) was one of the worst performers today, shedding 1.04% during the session. Following Japan’s announcement of its multi-billion dollar emergency stimulus package, the yen fell to a two year low against the dollar, forcing this ETF to gap significantly lower at the open. FXY recovered slightly from its earlier losses, eventually settling at $109.92 a share [see Asia-Centric ETFdb Portfolio].
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ETF Chart Of The Day #2: (KBE)
The SPDR S&P Bank ETF (KBE, A-) also performed poorly today, shedding 0.84% during the session. Following Wells Fargo’s rather sour earnings report, financial shares fell, forcing this ETF to tumble during the morning hours. KBE slid sideways for the remainder of the day, eventually settling at $24.76 a share [see Financials Free ETFdb Portfolio].
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ETF Fun Fact Of The Day
The best-performing retirement strategy over the trailing four week period has been the Aggressive Portfolio, which has gained nearly 4.8%.
Disclosure: No positions at time of writing.
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