Profit taking pressures swept across Wall Street today after troubling news from the euro zone over the weekend prompted a broad sell-off. According to reports, Cyprus is considering plans to impose a tax on bank depositors, a precondition for receiving a $13.08 billion bailout form the European Commission, the ECB, and the IMF. Many fear that this drastic policy action could spill over to other nations in the currency bloc, namely the severely debt-burdened Italy, Spain, and Greece. On the homefront, investors digested a reading of home builders’ confidence, which fell more than expected and for a second straight month[see Free Member Report: How To Pick The Right ETF Every Time].
Global Market Overview: Stocks Close Lower on Cyprus Fears
Following news of Cyprus’s bailout plan, all three major U.S. equity indexes fell to close in negative territory. The S&P 500 ETF (SPY, A) fell 0.55%, as its underlying index fell further away from its all-time high. The Dow Jones Industrial Average ETF (DIA, B) fell 0.45%, while the tech-heavy Nasdaq ETF (QQQ, A-) slid 0.22% lower.
In Europe, markets were broadly lower as concerns over the Cyprus bailout spilling into other areas of the currency bloc heightened. Meanwhile, Asian markets were also lower on the Cyprus news. Japan’s Nikkei Stock Average tumbled 2.7%, while Australia’s S&P ASX Index and Hong Kong’s Hang Seng Index both fell jumped 2%.
Bond ETF Roundup
U.S. Treasuries pared gains following reports of the proposed tax on all depositor sin Cypriot banks. Yields on 10-year notes and 30-year bonds fell 2 basis point, while 5-year note yields fell 3 basis points [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures managed to close slightly higher today after the initial shock of the Cyprus bailout started to wear off; Brent crude, however, traded lower. Natural gas futures were higher today on weather-related data. Meanwhile, gold futures traded higher to hit its highest level since late February.
ETF Chart Of The Day #1: (GREK)
The FTSE Greece 20 ETF (GREK, C) was one of the worst performers today, shedding 3.63% during the session. After news of Cyprus proposing to levy taxes on bank depositors hit the street, this ETF gapped significantly lower at the open. GREK slid sideways for the remainder of the day, eventually settling at $16.72 a share [see Euro Free Europe Portfolio].
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ETF Chart Of The Day #2: (IXG)
The S&P Global Financial Index Fund (IXG, B+) was also one of the weaker performers today, shedding 1.57% during the session. Financial shares, both domestic and international, were among today’s worst performers, forcing this ETF to gap significantly lower at the open. IXG slid sideways for the remainder of the day, eventually settling at $48.80 a share [see Financials Free ETFdb Portfolio].
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ETF Fun Fact Of The Day
The best-performing regional strategy over the trailing 4-week period has been the Global Titans ETFdb Portfolio, which has gained 1.74%.
Disclosure: No positions at time of writing.