Selling pressures swept across Wall Street once again today, with the S&P breaking below the 1,500 level and the Dow declining more than 200 points. Sparking the selloff was investors’ heightened concerns over Italy’s parliamentary elections, which produced no clear winner. Given that Italy is the euro zone’s third largest economy, the country’s instability has led many to understandably question whether or not the currency bloc will be able to stem its financial crisis. In other economic news, the Federal Reserve Bank of Dallas reported that business activity among Texas-area manufactures expanded at a slower rate in February than in the previous month [Be sure to check out the real estate news, trends, tips and tricks over at Dividend.com].
Global Market Overview: Stocks Tumble On Italian Elections
Following Italy’s parliamentary elections, all three major U.S. equity indexes fell to close in negative territory today. The S&P 500 ETF (SPY, A) tumbled 1.90%, as its underlying index fell below the widely-watched 1,500 level. The Dow Jones Industrial Average ETF (DIA, B) sunk 1.54%, while the tech-heavy Nasdaq ETF (QQQ, A-) fell 1.23%.
In Europe, markets were mostly mixed with Italy’s FTSE MIB Index and Germany’s DAX closing higher, and the Stoxx Europe 600 slipping 0.1%. Asian equities were broadly higher after Japanese Prime Minister Shinzo Abe announced his plans to nominated Haruhiko Kuroda, a proponent of easy monetary policy, as the next governor of the Bank of Japan. Japan’s Nikkei rallied 2.4%, while China’s Shanghai Composite Index inched 0.5% higher.
Bond ETF Roundup
U.S. Treasuries prices were higher today after Italy’s election had investors flocking to their favorite safe haven. Yields on 10-year notes fell 9 basis points, pushing yields to the lowest level in more than a month. 30-year bond and 5-year note yields fell 7 and 6 basis points, respectively [see also Seven Simple & Cheap ETF Model Portfolios].
Crude oil futures ended slightly lowered today, pressured by a turn higher in the dollar. Prices for RBOB gasoline and Brent were also lower. Gold futures rebounded, as Italy’s elections spurred traders to return to the safe haven metal; prices for silver were also higher.
ETF Chart Of The Day #1: (VXX)
The S&P 500 VIX Short-Term Futures ETN (XLI, A+) was one of the best performers today, gaining a whopping 13.7% during the session. As selling pressures rose, the CBOE Volatility Index (VIX) surged more than 30% to trade near 19, forcing this ETF rally for the majority of the day. VXX’s peaked during the last hours of trading as volumes peaked, eventually settling at $25.56 a share [see Low Volatility Portfolio].
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ETF Chart Of The Day #2: (EUO)
The UltraShort Euro Fund (EUO, A) also posted a solid performance today, gaining 1.90% during the session. Following Italy’s election, the Euro took a steep tumble today, forcing this leveraged short ETF to rally throughout the day. EUO continued a steady climb, eventually settling at $19.33 a share [see Euro Free Europe Portfolio].
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ETF Fun Fact Of The Day
The best-performing regional strategy over the trailing 3-year period has been the Ex-Europe ETFdb Portfolio, which has gained 22.92%.
Disclosure: No positions at time of writing.
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