Stocks surged in Thursday trading as a solid jobs report and an
accommodative stance from the ECB led to broad buying in the
markets. Jobless claims came in below expectations while the ADP
report crushed predictions, showing that 52,000 more jobs were
created in the month than the consensus was projecting.
Meanwhile in Europe, Draghi had a much-awaited press conference
in which the central bank President announced an
open-ended bond buying campaign
in order to help troubled peripheral states get their economies
back in order. Still, the program will have some conditions
attached, will be 'sterilized', and there was not an interest rate
cut, suggesting that the bank still has some tools at its disposal
if these latest measures don't boost the struggling economies of
Europe (see
ETFs for the Most Competitive Countries on
Earth
).
These news items helped to send the Dow higher by 1.9% while the
S&P 500 added just over 2% and the Nasdaq surged by nearly 2.2%
on the session. European markets did even better on the day as the
French benchmark added over 3% while Italian and Spanish benchmarks
rose, respectively, 4.3% and 4.9% in Thursday trading.
Despite all the movement in the equity market, forex trading was
pretty flat overall, although it did see some significant
volatility. Nevertheless, the dollar lost about 0.2% against the
world's major currencies, led by a strong performance of the Aussie
dollar against the greenback.
Yet while forex trading was flat, activity in the bond market
was especially choppy. Italian and Spanish yields plunged-with
Spanish 10 years hitting the 6.00% mark-while German and American
bond yields both rose by eight basis points in Thursday trading
(Read
Invest like Mitt Romney with These Three ETFs
).
The movement did transfer over into the commodity world, as
precious metals saw some positive trading along with a few of the
major grains as well. However, industrial metals and most of the
major energy products were trading on shaky footing on the day, led
by a 1.1% loss in natural gas and a 0.5% slump in the copper
market.
Thanks in part to some actual market moving events, ETF trading
was finally-and broadly-back above historical average levels. This
was especially true in the international ETF market and in some
commodity products as well, although large caps and a few
sector-based U.S. products didn't exactly see the most robust
trading levels on the day.
In particular, ETF investors saw the
CurrencyShares Japanese Yen Trust (
FXY
)
trade on higher volume today, much like a number of other ETFs in
the currency world. This fund saw volume that was roughly 4x its
normal level, pushing the total shares changing hands well over the
650,000 mark (see
Five Cheaper ETFs You Probably Overlooked
).
The product did lose about 0.7% today as the solid jobs report
helped to push investors back into dollars once more. The easy beat
on the jobs front suggested to many that the American economy may
be improving, helping to firm up support for the dollar, especially
with the uncertainty hanging over the euro despite its new bond
buying program. Given this, demand for yen was low today, although
there was some volatility, pushing the product lower in Thursday
trading.
Another ETF which saw an outsized level of volume was the
iShares MSCI South Africa Index Fund (
EZA
)
. The product usually does about a quarter million shares in volume
in a normal day but saw more than 1.7 million shares move hands in
Thursday trading.
This boost in volume also came on an up day for the fund as a '
peace accord
' was signed in the country between the strikers and the mining
company. This helped to end the nearly four week long strike and
assisted in taking some of the political risk off of the table for
the nation, at least in the short-term (read
Time for the South Africa ETF?
).
The timing of the event couldn't have been better either, as it
came on a risk-on day for the markets, and one in which precious
metals were again in vogue. Since South Africa is a risky emerging
market and also a key producer of metals, it was a big beneficiary
on the day, adding more than 4.3% on the session.
(see more in the
Zacks
ETF Center
)
ISHARS-S AFRICA (EZA): ETF Research Reports
CRYSHS-JAP YEN (FXY): ETF Research Reports
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