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SPY Falls over Mixed Economic Data

Renee Blakely

Utility Sector Weighs on SPY, while Energy Sector Rises

SPY falls 0.12%

The SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P 500 Bull & Bear 3x Shares ETF (SPXL) fell 0.12% and 0.52%, respectively, on Monday, November 23. Markets experienced both rises and falls, and the gains in the consumer staples sector were capped by the losses in the utility sector. Overall, sectors that fell on the day outnumbered those that rose.

Economic front

The Chicago Fed National Activity Index for October 2015 came in at -0.04, which is a soft figure but a great improvement from September’s revised reading of -0.29. The monthly index reflects overall economic activity and inflationary pressure. On the other hand, the purchasing managers’ manufacturing index for November 2015 came in at 52.6, which is below the lower end of the consensus range of 53.8–55.0. Although an index reading above 50 indicates monthly growth, the rate of growth is very low mainly due to weak global demand and a strong US dollar, which impacted US exports.

The graph above presents a snapshot of market performance on November 23. The US dollar is represented by the PowerShares DB US Dollar Bullish ETF (UUP), oil is represented by the United States Oil Fund (USO), and gold is represented by the SPDR Gold Trust (GLD). The total bond market is represented by the Vanguard Total Bond Market ETF (BND), while volatility is represented by the Volatility S&P 500 (^VIX).

US crude oil rose 0.6% to $42.17 per barrel in New York on the day. The US dollar gained strength on expectations that the Federal Reserve will increase short-term interest rates in its December meeting. The expectations among US investors of a rate hike are rising as the meeting day approaches.

The strong dollar and the rate hike expectations led to a fall in gold prices on November 23. The rising dollar also affected the commodities, especially metals. Therefore, stocks of Freeport-McMoRan (FCX), Nucor (NUE), Allegheny Technologies (ATI), and Newmont Mining Corporation (NEM) fell 3.0%, 1.6%, 1.5%, and 0.7%, respectively, on the day.

Let’s look at the sector-wise performances of the SPDR S&P 500 ETF (SPY) on the day.

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