TFI SPDR Nuveen Bloomberg Municipal Bond ETF

American stocks had another rocky, and ultimately negative, session as the Fed minutes did little to boost sentiment. Instead, the release showed that few in the FOMC supported more QE, sending stocks immediately lower although they did come back a bit to close out the day.

Thanks to this lack of more easing support, the Dow finished the day lower by about 0.4% while the Nasdaq slumped by 0.5% on the day. However, the S&P 500 finished the day flat, while major benchmarks in London and Frankfurt also kept out of the red during Wednesday’s trading.

From a sector perspective, gains were seen in the basic materials and financial markets, while industrials, conglomerates, services, and tech all finished the day in the red. Among the biggest gainers were in the regional bank segment while oil and gas drillers/refiners also had a banner session (see Coal ETFs Buried By Patriot Coal Bankruptcy).

Despite some mid day weakness, the U.S. dollar finished the day in the green following the lack of easing support from the Fed. However, yields also trended higher for U.S. government debt, pushing the 10 year up one basis point to a 1.52% payout.

Commodity markets also finished the day broadly higher, as all of the energy products roared ahead, led by a 2.7% move in WTI crude and a 4% jump in natural gas. Many soft commodities, however, did finish the day in the red, as grain commodities fell despite a solid crop report which suggested disaster conditions in much of the key growing regions of the U.S.

In ETF trading, investors once again saw relatively light summer volume, with many of the most popular products trading below their usual averages. This was especially the case in the Asia-Pacific region as well as the U.S. mid and small cap spaces, while modest volume was seen in some of the smaller bond products as well as a few agricultural ETFs as well.

Volume was particularly robust in the specialized Teucrium Corn ETF (CORN) immediately following today’s crop report. The product usually trades about 80,000 shares in a normal session but saw a spike in interest to over 660,000 shares during Wednesday trading (read Buy American with these Three Commodity ETFs).

Traders initially bid up CORN by a few percent as the USDA slashed projected corn yields by about 12%. However, as traders delved deeper into the report some focused in on the fact that higher quality soil farms have fared quite well, giving some a ray of optimism in the gloomy report. Thanks to this, CORN actually finished the day lower by about 1.9%, although it is still up over 23% in the past one month period.

Another ETF segment which saw a great deal of interest during Wednesday’s trading was in the municipal bond ETF world. One of the more popular funds that saw an outsized day of trading was the SPDR Nuveen Barclays Capital Muni Bond ETF (TFI) which almost had twice as much volume as normal (see Three Muni Bond ETFs to Weather the Coming Storm).

Other ETFs in this space also saw a great deal of trading activity as another Californian city, this time San Bernardino, sought chapter 9 bankruptcy protection. Despite this, most muni bonds didn’t really decline that much although activity was high, and especially concentrated into block trades during today’s afternoon session. In fact, TFI actually finished the day in the green while other funds in the space also managed to trend higher despite the bearish outlook.

(see more in the Zacks ETF Center)

 
TEUCRM-CORN FD (CORN): ETF Research Reports
 
SPDR-NB MUNI BD (TFI): ETF Research Reports
 
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