ETF Trading Report: Grains, Consumer ETFs In Focus - ETF News And Commentary
July 05 2012 - 12:05PM
Zacks
Despite relatively good data on the jobs front, U.S. stocks had
trouble in the post- Independence Day session as a weak ISM service
report more than cancelled out the strong employment numbers. In
fact, both jobless claims and the ADP report came in better than
expectations while the ISM services came in at 52.1, lower than the
consensus of 53.0.
Thanks to this, the broad S&P 500 started the day lower,
came back to break even during mid-day trading, only to finish the
day lower by about half a percent. The Dow had a similar
trajectory, sliding by about 0.4%, while the Nasdaq finished at
breakeven, closing at 2,976.
From a sector perspective, basic materials and financials led
the market lower, although health care and utilities also faced
some weakness on the day. Some big tech names like Apple and Google
held up well in the environment, gaining over 1.5% each, while the
department store segment was also a big winner in Thursday trading
(read Three Great Tech ETFs That Avoid Apple).
In the bond market, yields continued to fall for longer term
debt as 10-year and 30 year payouts slumped to, respectively, 1.60%
and 2.71%. Meanwhile, the U.S. dollar was also a winner along with
bond investors, as the greenback rose against the European
currencies including a 1.36 cent move against the euro in Thursday
trading.
Although investors did see a strong dollar, commodities
continued to strengthen in Thursday’s session. Besides WTI crude,
all the energy products rose while most of the grains advanced as
well. This was led by a nearly 5% move in both corn and wheat,
while soybean also added nearly 4% on the day too (read Three ETFs
for the Unconventional Oil Revolution).
Probably due in part to the post Holiday environment, investors
saw a light level of trading in many ETF products during
Thursday. In fact, gold traded about half its normal volume
while low levels were also seen in major sector, index, and
emerging market funds as well. However, there were a couple
segments that did see some major activity nonetheless, including
some in the real estate, mid cap segment, and international
markets.
In particular, investors saw a huge uptick in volume in the
consumer space as represented by the iShares S&P Global
Consumer Staples ETF (KXI). This product usually sees
volume of just 52,000 shares in a normal day but experienced a
spike to 457,000 shares during Thursday trading.
Not only did this spike come on a day of relatively light
trading, but it was pretty well spread out among the day too.
However, investors did see a number of relatively large blocks in
the end of the day including a few 20,000+ share blocks (see The
Comprehensive Guide To Consumer Staples ETFs).
This move followed relatively solid volume in the American
consumer staples market, suggesting that some investors are looking
to tilt their portfolios to this relatively safe segment of the
equity world.
Another fund that was in focus during today’s trading session
was the iPath DJ-UBS Grains TR Sub Index ETN
(JJG). The product usually does about 56,000 shares in a
normal session but today experienced a spike to nearly 316,000
shares (also read Buy American with these Three Commodity
ETFs).
Undoubtedly, the main reason for this big move was the
sweltering heat across much of the key grain producing areas in the
country. This weather, which reached record setting levels in many
Midwestern states, has had a devastating impact on many crops and
has pushed many commodities sharply higher in the process.
In fact, the three products in this note—soybeans, wheat, and
corn—were all up significantly in Thursday trading, sparking huge
amounts of interest in this basket product from iPath today.
(See more on ETFs at the Zacks ETF Center)
IPATH-DJ-A GRNS (JJG): ETF Research Reports
ISHARS-SP CN ST (KXI): ETF Research Reports
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