Despite the bailout deal for Spanish banks, U.S. equity markets
tumbled to start the week as investors viewed the rescue as a
temporary stopgap to a larger issue. Furthermore, investors focused
in on upcoming Greek elections and how the Spanish bailout will
actually be paid for as reasons to be bearish starting the new
Thanks to this sentiment, all the major benchmarks were down on
the day led by a 1.7% loss in the Nasdaq. Meanwhile, the Dow and
the S&P 500 both lost on the day too, losing, respectively,
1.1% and 1.3% in the session.
The biggest losses were in the financial and tech sectors, while
red was also seen throughout the industrial segment as well.
Utilities managed to hold up pretty well, while a similar
performance was seen in the telecom, healthcare, and consumer
segment staples to start the week (
Three Great European ETFs Beyond Germany
One of the few winners on the session was the U.S. dollar as the
Dollar index rose above the $82.5 mark led by a strong performance
against the euro and the resource currencies. This helped to push
investors back into T-bills as the 10 Year yield fell to 1.6% while
the 30 year slumped to a yield of 2.72%.
Commodities were another segment of weakness as virtually all
commodities were in the red. The biggest losses came in the energy
space led by a 3% slump in WTI oil and a 4.1% slide in natural gas.
Beyond these, weakness was also seen in softs although gold and
silver did manage to stay in the green thanks to the turmoil (see
For Europe ETFs, It Is Hard To Beat Switzerland
ETF trading was surprisingly modest across a variety of products
as most finished in line with average volume levels. Investors did
see some outsized interest in broad foreign ETFs, commodity funds,
and a host of leveraged products to open up the week.
In particular, investors saw a decent amount of interest in the
consumer discretionary space and especially in the case of the
Guggenheim S&P 500 Equal Weight Consumer Discretionary
. The product usually sees a paltry volume below 15,000 shares but
experienced a massive spike to just over 344,000 shares during
Monday trading (see
Alternative ETF Weighting Methodologies 101
The vast majority of this volume came thanks to a nearly quarter
of a million share block that traded in the morning leaving much of
the day void of trades. Investors also saw outsized volume levels
in other products in the space but none on par with what RCD saw,
suggesting that the equal weight methodology was the way to tackle
the space for many investors to start what looks to be a rocky week
Another ETF that experienced a boost in trading activity to
start the week was the pharma sector best represented by the
SPDR S&P Pharmaceuticals ETF (
. The product usually sees volume of about 90,000 shares, but saw a
spike to just over 1.3 million shares during today's session (see
Forget Big Pharma, It Is Time For A Biotech ETF
The volume across the pharma space was high as investors sought
exposure to perceived safe havens although this ETF fell along with
the broad market to start the week. Interestingly, a good chunk of
the volume during the day was due to a 300,000 share block in the
morning session, although there was reasonable activity in the
final half hour as well.
Seemingly, some investors are looking to pharma as a more
defensive way to play the crisis, however, only time will tell if
this is the way to attack the markets at this difficult time.
(see more on ETFs in the
GUGG-SP5 EW C D (RCD): ETF Research Reports
SPDR-SP PHARMA (XPH): ETF Research Reports
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report