Major U.S. and foreign ETFs closed the month with strong gains
following the Federal Reserve chairman's highly anticipated
speech from the Fed's annual confab in Jackson Hole, Wyo.
Ben Bernanke didn't announce any new undertakings, but his
emphasis on the weak job market left the door open for more
SPDR S&P 500
) rose 0.53%.
SPDR Dow Jones Industrial Average (
) jumped 0.68%.
PowerShares QQQ (
), a basket of the 100 largest nonfinancial stocks on the Nasdaq,
The market also may have cheered positive consumer data. The
Reuters/University of Michigan consumer sentiment index lifted to
74.3 at the end of August from a preliminary reading of 73.6.
Economists had expected a slight drop. Inflation expectations
remained the same, with consumers expecting prices to rise 3.6%
over the next year.
Meanwhile, the Chicago purchasing managers index eased to 53.0
in August from 53.7 in July, indicating economic expansion is
decelerating. But Chicago is just one of many regional
manufacturing surveys released for August. On average, they have
shown little change, with some improvement in Philadelphia,
Richmond, Dallas and Kansas City and weakening in New York,
Chicago and Milwaukee, according to High Frequency Economics.
Investors should expect a pullback in September as investment
gains are booked after the summer rally and because it is the
historically worst month for the stock market, says Ronald Lang,
principal at Atlas Wealth Management.
"Use that as a good buying opportunity going into the November
presidential election," Lang wrote in a client note. "We expect
September to end flat."
On the other hand, Mark D. Arbeter, chief technical strategist
at S&P Capital IQ, expects the market to rise over the next
couple of months.
"Over the past couple of weeks, the major stock indices as
well as many individual stocks have paused or pulled back very
quietly, and it appears to us that they are setting up for the
next leg higher," Arbeter wrote in his weekly technical report.
"Quiet, listless markets are not signaling a market top, but
rather a refueling before the next fireworks begin."
IShares MSCI EAFE Index (
), tracking developed foreign markets, jumped 0.94% as it snapped
a three-day losing run.
IShares MSCI Emerging Markets Index (
) vaulted 0.90%, breaking a four-day losing streak.
For the week ending Aug. 29, emerging market stock funds took
in new money for the fifth straight week -- their longest inflow
streak since the first quarter, according to EPFR Global.
Inflow into China equity funds climbed to a 32-week high of
$500 million as "Chinese officials talked up plans to boost
spending on industrial development, infrastructure and energy
conservation," EPFR wrote, "although it is not yet clear how, or
at what pace, these investment programs will be funded."
Latin America stock funds were the only major emerging market
fund group to see outflow, as investors pulled money from both
Mexico and Brazil.
Europe equity funds experienced $1 billion in outflow, while
U.S. large-cap ETFs attracted $3.6 billion in inflow.
Gold and precious metals funds pulled in $1.4 billion after
seeing $1.5 billion inflow last week, as precious metals prices
hit a five-month high.
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