After a rather sour start, U.S. markets made a comeback late in the day following encouraging comments on fiscal cliff talks and positive signs that the Fed will continue its stimulus package next year. During a White House event, President Obama emphasized that his hope “is to get this agreement done before Christmas.” House of Representatives Speaker John Boehner also expressed optimism about the budget talks, stating that while Republicans are still opposed to raising taxes, they are willing to make the sacrifice as long as appropriate spending cuts are made. Meanwhile, in its latest Beige Book summary, the Fed reported that the U.S. economy is moving at a moderate pace. Investors, however, are expecting the central bank to announce a continuation of its bond buying program next year to help boost the slow-growing economy [see also 101 ETF Lessons Every Financial Advisor Should Learn].
Global Market Overview: Stocks Make A Reversal On Optimistic Cliff Deal Talks
After opening in negative territory, all three U.S. equity indexes managed to log in modest gains on the day following encouraging budget talks and signs of the Fed continuing its bond buying program. The Dow Jones Industrial Average (DIA) came out on top by a slight margin, rising 0.83% during the session. Nasdaq (QQQ) trailed slightly behind with its gain of 0.81%, while the S&P 500 (SPY) posted a 0.79% uptick. European equities recouped earlier losses to close with modest gains on the day after demand at an Italian debt auction was stronger than expected. Meanwhile, Asian equities were mostly lower on fiscal cliff fears; Japan’s Nikkei Stock Average dropped 1.2% and China’s Shanghai Composite slipped 0.9% lower.
Bond ETF Roundup
U.S. Treasuries rose for a third straight day, as investors remained cautious despite today’s positive comments from Washington. Signs of the Fed continuing its stimulus package in 2013 also weighed heavily on Treasury yields [see also 5 Best (And 5 Worst) ETF Performers Over The Last Year].
Commodity ETF Roundup
Across the board, commodities were mostly lower today as traders weighed the fiscal cliff and Fed’s beige book commentary. Gold prices fell 1.5% during the session, the most in nearly a month. Meanwhile, natural gas futures tumbled lower as forecasts of a mild winter continue to pile in [see also Get Ready To Buy Natural Gas].
ETF Chart Of The Day #1: FXG
The First Trust Consumer Staples AlphaDEX Fund (FXG, B-) was one of the best performers today, gaining 1.77% during the session. Green Mountain Coffee Roasters (GMCR), which accounts for 5.2% of FXG’s portfolio, shot up an incredible 27.32% today after the company reported earnings that far surpassed analysts expectations. In response FXG soared during the afternoon hours, eventually settling at its high of $25.31 a share [see also Consumer Centric ETFdb Portfolio].
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ETF Chart Of The Day #2: VDE
The Vanguard Energy ETF (VDE, A) also delivered a strong performance today, gaining 1.05% during the session. Energy shares were among today’s top advancers,with Chevron (CVX) leading the way with its 2.13% gain. After gapping significantly lower at the open, VDE made a solid turnaround during the afternoon hours, eventually settling near its high of $102.78 a share [see also Energy Bull ETFdb Portfolio].
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ETF Fun Fact Of The Day
Currently, there are only 7 ETFs that offer exposure to Costco Wholesale Corporation (COST), whose stock rallied 6.29% today after the company reported that it will pay a special dividend of $7 a share. The Dynamic Retail ETF (PMR, B+) gives the stock the heaviest weighting at 5.10%.
Disclosure: No positions at time of writing.
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