Although markets started Monday trading on a down note, stocks
rebounded in the afternoon part of the session, leading the major
indexes back to breakeven on the day. Overall, the Dow finished in
the red by 0.1% while the other two major indexes finished in the
green with the S&P 500 squeaking by with a one point move
higher and the tech-heavy Nasdaq adding close to 0.5% to open the
This rocky session came on the back of weak data from both of
the world's major markets, the U.S. and China. America saw factory
orders decline while China saw services show weakness as the
non-manufacturing PMI fell to
down from 56.1 in April.
Both of these releases suggested more weakness in the global
economy, leading many investors to sell-off stocks in the process.
However, more speculation over central bank intervention in the
markets helped spur some late session buying as hopes over a third
round of QE are beginning to reach a fevered pitch.
With this backdrop, defensive names led on the day, boosted by
strong performances in the health care and consumer goods sectors
as well as strength in the utilities segment. On the other side,
banking continued to be weak while industrials and some energy
names sputtered to open up the first full week of June (see
Inside The Forgotten Energy ETFs
Bond and currency trading was also mixed as the dollar fell a
tad against many of the world's major currencies, pushing the
greenback below the 82.6 mark in the dollar index. Meanwhile, bond
yields rose across the board in Monday trading with the 10 year
adding about seven basis points while the 30 year added four basis
points to finish at a 2.56% yield.
Meanwhile, commodities finished broadly higher in Monday trading
led by solid performances in the energy space. Many softs also
added in Monday's session although there was some weakness in the
precious metals and a few of the grains to open up the week.
In ETF trading, volume was high across the board led by strength
in many of the leveraged products as well foreign-focused ETFs.
Beyond this, there was less interest in a number of U.S. financial
ETFs, as well as some of the style box products on the day that
focus on the mid cap segment.
In particular, the large cap blend ETF space was a hot place for
assets in Monday trading, led by outsized volumes in the
iShares S&P 1500 Index ETF (
. This product usually sees volume of just 21,400 shares in a
normal session but saw a spike to nearly 550,000 shares to start
the week (see
Ten Biggest U.S. Equity Market ETFs
The vast majority of this volume came in the morning as a block
of over 400,000 shares changed hands followed shortly by another
block approaching the 125,000 mark. This left paltry volume for the
rest of the day and suggested that much of the interest in this
product came from large traders seeking to position themselves in
the large cap blend space.
In fact, other large cap blend ETFs also saw outsized trading
volumes with many experiencing trading activity that was more than
double the norm. Given this, the large cap blend space could be one
worth watching in the days ahead as more economic data is released
across the globe.
In terms of sectors, investors saw a great deal of interest in a
number of consumer ETFs but especially in the case of the
Guggenheim S&P Equal Weight Consumer Discretionary ETF
. This product usually sees volume of just 12,500 shares but saw a
spike to nearly 200,000 in Monday's session.
Interestingly, the vast majority of this activity came in the
form of a huge block trade in the early afternoon. In this period a
block of 171,000 shares changed hands and accounted for much of the
day's volume. In fact, there was a period of more than 90 minutes
when the fund did not trade at all (read
Lower Wal Mart Exposure With These Three ETFs
This outsized trading activity seemed to be a theme in the
consumer space during Monday's session as a number of other ETFs in
this space saw outsized volume as well. However, all of these
spikes paled in comparison to RCD although investors did see a
great deal of activity in the more 'active' or narrowly focused
funds in this segment.
(see more on ETFs at the
ISHARS-1500 IDX (ISI): ETF Research Reports
GUGG-SP5 EW C D (RCD): ETF Research Reports
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