ETF Trading Report: Spain, Natural Gas ETFs In Focus - ETF News And Commentary
June 14 2012 - 12:01PM
Zacks
Stocks rose broadly in the early part of the session as hopes
for a broad Greek coalition helped to spur gains in the morning.
Then, in the final hours, investors scooped up more shares on
rumors of a coordinated central bank move coming soon, pushing
stocks to highs for the session before they tapered off a bit into
the close.
Overall, the Nasdaq finished the day ahead by 0.6% while the
broader indexes gained more with the S&P 500 jumping by 1.1%
and the Dow adding 1.2% on the day. This came after a
mixed-to-negative session in Europe and a day of red in Asia,
suggesting that sentiment is quite fickle and that rumors and
speculation are now in the driver’s seat.
Thanks in part to a risk-on trade, the U.S. dollar slumped below
the $82 mark as the euro gained about seven-tenths of a cent
against the greenback. Meanwhile, bonds were flat but tilted
negative, as the 10 year saw yields rise three basis points to the
1.63% level (Read PUW: Crushing The Clean Energy ETF
Competition).
Commodities were also mixed, as natural resources were across
the board in Thursday trading. Most energy products rose while
natural gas stormed higher, adding over 15% on the day.
Agricultural and metals were more or less flat, as coffee and
silver fell, while gold and corn added a bit in the session.
For ETF trading, volume was heavy thanks to the flurry of late
session activity, but without that, it probably would have been a
light session across the board. Still, in terms of heavy volume
sectors, some commodities, short leveraged products, and U.S.
sectors did see some outsized trading during the Thursday
session.
One ETF that experienced a day of outsized volume was once again
the iShares MSCI Spain Index Fund (EWP). Volume
levels were nearly triple the average, and while it was quite
spread out, a large chunk of the trading came during the final hour
of the session (See Spanish Bailout: Did It Help European
ETFs?).
Still, the product managed to add about 1.7% on the day as the
country was downgraded by Moody’s to one level above junk while
yields on 10-year debt soared to nearly 6.96%. Clearly the Spanish
debt situation is beginning to reach a breaking point so investors
should look for more activity, and volume, in this product during
Friday’s session as well.
Another ETF which experienced a jump in interest was in the
natural gas space, specifically in the case of the United
States Natural Gas Fund (UNG). The product usually sees
volume of about 10 million shares but saw a massive spike to the 27
million share mark during Thursday trading (See Forget UNG Try
These Natural Gas ETFs Instead).
This enormous move came as UNG added close to 15% on the day
thanks to an extremely bullish reading in the weekly inventory
report. In the release, the EIA said that inventories rose 67 bcf
during the last week, decidedly below the 75bcf that was
forecast.
This move also helped to cause a spike in interest in both of
the 3x leveraged natural gas ETNs—DGAZ and
UGAZ—as these products, respectively, lost 40% and
gained 40% on the day. Both notes use a triple daily leverage
mechanism to accomplish their goals and saw volume that was well
above the average as well (read Have The Natural Gas ETFs Finally
Bottomed Out?).
VEL-3X INV NG (DGAZ): ETF Research Reports
ISHARS-SPAIN (EWP): ETF Research Reports
VEL-3X LNG NG (UGAZ): ETF Research Reports
US-NATRL GAS FD (UNG): ETF Research Reports
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