ETF Trading Report: Grains, Consumer ETFs In Focus - ETF News And Commentary


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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , ETFs

Referenced Stocks: JJG , KXI

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