U.S. stocks had a mixed session in Wednesday trading as all eyes
were on the Fed minutes which were released about halfway through
the day. In the release, it looked as though the FOMC was getting
ready for another round of bond buying,
setting the stage for QE3
.
"Many members judged that additional monetary accommodation
would likely be warranted fairly soon unless incoming information
pointed to a substantial and sustainable strengthening in the pace
of the economic recovery."
Given this new data, many investors believe that now the Fed
will act sooner rather than later and embark on a new campaign of
bond purchases. Thanks to this, both the S&P 500 and the Nasdaq
finished the day in the green although the Dow did lose about 0.2%
on the day (see
the Guide to Retail ETFs
).
Sectors were mostly mixed, although investors did see some
weakness in the broad tech market and the consumer product segment,
while energy and a few health care names did surprise to the
update. Meanwhile, firms in the home construction or supply
business had a banner day, while Apple continued to impress, adding
another 2% on the day.
The dollar was again weaker in Wednesday's session as the
greenback fell against the European currencies although it did see
some resistance in the yen market. Additionally, the prospect of
more bond buying helped to push yields down again on the 10 year,
as rates fell about 10 basis points down to the 1.7% mark (read
Why It Is Time for the Brazil Infrastructure
ETF
).
Commodities were also a big winner thanks to the weakened
dollar, as markets broadly rose in the natural resource trade. All
the energy products were up along with the metals, while most
agricultural commodities slumped, led by a 2% loss in the cocoa
market.
In ETF trading, volume finally reached normal levels today in
many equity products, although some of the more specialized sector
and capitalization level ETFs were a little light once again. In
terms of big trades, commodity ETFs dominated the scene while a few
of the global and currency funds also saw large moves as well.
In particular, ETF investors saw an outsized level of interest
in the silver market, especially with the
PowerShares DB Silver ETF (
DBS
)
. This fund saw roughly 10 times as many shares move hands today
while other silver ETFs also saw modest increases in volume as well
(see
Time to Consider The Silver Miners ETF
).
Clearly, the interest in the product is coming as silver is
finally bouncing off of its 2012 lows and is once again testing
multi-month highs. Additionally, DBS was up over 2.3% today, a
level that is likely to attract some attention given the lackluster
performance in the rest of the market.
Another segment that saw a great deal of popularity in today's
trading environment was the
CurrencyShares Japanese Yen Trust (
FXY
)
. This product usually does about 160,000 shares in a normal
session but saw volume spike to just over 1.65 million shares in
Wednesday's session (read
Five Cheaper ETFs You Probably Overlooked
).
The outsized volume was also seen in the short-yen products as
well, although it should be noted that FXY saw most of its volume
right after the FOMC minutes release. This means that some
investors were probably just riding the wave of volatility in the
currency market, but also that much of the betting on the yen is
based on how investors think the dollar will move over the coming
days, instead of on Japanese fundamentals.
(see more in the
Zacks
ETF Center
)
PWRSH-DB SILVER (DBS): ETF Research Reports
CRYSHS-JAP YEN (FXY): ETF Research Reports
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