American equity markets struggled in Thursday's session as broad
weakness permeated all corners of the stock world throughout the
day. This slump came as unemployment claims beat expectations but
the ISM Non-manufacturing survey finished below the bottom of the
consensus range at 53.5.
This slump represents a 2.5 point slide in the key figure and
continues the trend lower that investors have been seeing for
several months now. As a result, this report overshadowed the
relatively good news from the unemployment report leaving
expectations mixed heading into the key employment situation
release due out at market open tomorrow.
Selling pressure was especially strong in the banking and energy
segments, although services tilted towards the consumer also sold
off on the day as well. Among the only winners in the session came
in the consumer staples, and health care names as these sectors
offered a respite from the broad market turmoil (read
Is The Italy ETF Next?
Thanks to this weakness, the dollar did see some inflows
although they were pretty modest against most of the world's major
currencies. Bonds were also stable in the session although some of
the short to medium term debt did see modest inflows, pushing
yields slightly lower in fixed income throughout the two to 10 year
Yet again, commodities did see weakness with selling especially
bad in the energy, precious metals, and grains markets. However, a
few products in the grains segment-led by wheat and rice-added a
bit on the day while natural gas surged 3.8% thanks to a rare
bullish storage report from the volatile fuel (see
PIMCO Launches Global TIPS ETF
In ETF trading, investors saw volume that was roughly in line
with historic levels in most of the top products in the industry.
However, trading levels were elevated in the commodity markets
while international products broadly took a breather-except for a
few exceptions-leaving U.S. sector ETFs as the big leaders in
volume for the day.
In particular, trading was elevated in the
Guggenheim Airline ETF (
which saw a spike in interest in Thursday trading. The ETF usually
trades a paltry 8,500 shares in a normal session although volume
reached the 22,000 level today.
The ETF is heavily focused on three airlines; Delta, United
Continental, and Southwest, although 23 other firms find their way
into the fund. While the three listed above weren't that volatile,
a top six component,
Spirit Airlines (
, was a big mover, losing 5% on the day.
This move came as the company announced plans to charge $100 for
carry-on bags, more than double the cost of some of the airline's
tickets, possibly signaling some weakness in the company.
Nevertheless, this move lower wasn't enough to drag down the whole
sector as Delta and Southwest finished in the green and helped keep
FAA up 0.4% for the session.
Another ETF which saw an outsized level of interest was the
PowerShares DB G10 Currency Harvest Fund (
. This currency fund usually sees volume of about 178,000 shares in
a session but experienced a massive spike to 1.04 million shares in
Possibly, investors looked to position themselves in this fund
ahead of Friday's crucial jobs report, which could set the tone for
the market heading into the weekend. The ETF is long in a number of
resource currencies and has a short position in the dollar, the
yen, and the Swiss franc, so this composition may have also played
a role in the trading level increase (see
Bet Against The Dollar With These Three ETFs
Given this exposure profile and the weakness of some key
commodities, the product declined about 0.6% heading into Friday.
Since currency markets look to be in focus again after the jobs
report, we could see another outsized trading day for the product
to close out the week as well.
(see more on ETFs at the
SPIRIT AIRLINES (SAVE): Free Stock Analysis
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