Stocks were generally positive to open up the week, although
only modestly so as the Greek vote from over the weekend largely
went as expected. Nevertheless, yields continued to rise in Spain
and Italy, pushing rates for benchmark government debt up to,
respectively, 7% and 6% in the two troubled nations.
Nevertheless, the S&P 500 rose by about 0.1% on the day,
while the Nasdaq added 0.8% and the Dow was the outlier of the
group falling by 0.2%. This was largely due to more weakness out of
the banking sector while basic materials also slumped as well. On
the other side, Apple continued to move higher while many firms in
the services and health care space managed to add a bit in Monday's
Play Europe with This ETF Pair Trade
In currency trading, the dollar strengthened against most of the
world's major currencies, pushing the dollar index to just under
the $82 mark. This was led by a one cent gain against the euro, as
worries continue over the region's trillion dollar economies, while
the pound also suffered, falling by about half a cent against the
greenback on the session.
Commodities were more volatile to start the week, led by big
moves in the agricultural market. Many products, such as corn and
wheat, added several percentage points thanks to the hot weather
and its likely damage to the current crop. Meanwhile, most energy
products slumped again today although natural gas bucked the trend,
surging again by 7.4%.
Across the board in ETF trading, volume was light. This was
somewhat surprising given the likelihood of volatility thanks to
events in Europe, but many products saw underwhelming figures in
terms of volume to open up the week. However, we did see some
interest in a few commodity products, US sector ETFs, and large cap
funds in Monday trading (read
Time to Buy the Hedged Currency ETFs?
In particular, the insurance ETF sector saw a big boost in
volume, led by the SPDR
S&P Insurance ETF (
. This fund usually trades about 82,000 shares in a normal session
but saw a spike to nearly 470,000 shares to start the week.
Volume was pretty well spread out throughout the day, although
there were still a few big block trades in this ETF. Beyond that,
investors should note that this ETF's counterpart, the
iShares Dow Jones US Insurance Fund (
, also saw an outsized day of trading activity to open up this
week's trading activity.
Interestingly, these high volume levels came at a time when the
rest of the sector saw average to below-average levels of trading,
suggesting that some investors are looking to position themselves
in the space as opposed to big bank stocks or broker dealers (read
Insurance ETFs: No Rebound in 2012?
Another fund with a big day of volume was the
Vanguard Utilities ETF (
. This relatively safe sector ETF usually sees volume around the
65,000 share level but spiked to nearly 490,000 shares during
Interestingly, this came despite lackluster volume in many of
the other utility ETFs despite those funds having similar holdings
to VPU. Instead of a broad move into the space, like we saw with
the insurance ETFs, this appears to be a few block traders moving
en masse into this fund, as evidenced by a 107,200 block that moved
hands in the afternoon.
Given this, it is more difficult to draw any conclusions from
the move besides the fact that clearly to some investors, the safer
segments of the economy-utilities and insurance-are still in demand
despite the positive market performance over the last few days.
(see more in the
ISHARS-DJ INSUR (IAK): ETF Research Reports
SPDR-KBW INSUR (KIE): ETF Research Reports
VIPERS-UTIL (VPU): ETF Research Reports
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