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ETFs React to Jobs Report: Dollar, Stocks Rally – Gold, Treasuries Hit


A better-than-expected February jobs report had the major ETFs moving in Friday’s premarket. Safe-haven ETFs tracking Treasuries and gold dropped sharply after the nonfarm payrolls report, while ETFs tied to U.S. stocks and the dollar rocketed higher.

The iShares Barclays 20+ Year Treasury Bond Fund (TLT) slipped more than 1% as yields on the 10-year Treasury note traded as high as 2.09%. Bond prices and yields move in opposite directions.

Meanwhile, SPDR Dow Jones Industrial Average ETF (DIA) climbed 0.6% before the bell and was on track to set another all-time high at the open.

The U.S. economy created 236,000 jobs in February as the unemployment rate declined to 7.7% from 7.9%. The jobless rate fell to its lowest level in about five years. The report was much stronger than economists had forecast.

In currency markets, the dollar rallied in the wake of the nonfarm payrolls update. PowerShares DB US Dollar Index Bullish (UUP) rose 0.6% in premarket action. The dollar was likely rising on speculation an improving jobs market could make the Federal Reserve reconsider its easy monetary policies.

Also before Friday’s opening bell, SPDR Gold Shares (GLD) was down 0.8%.

SPDR Gold Shares


Full disclosure: Tom Lydon’s clients own GLD and TLT.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.