ETF Trading Report: Brazil, Consumer ETFs In Focus - ETF News And Commentary
June 19 2012 - 12:59PM
Zacks
Markets rose in Tuesday trading as hopes for Federal Reserve
intervention continued to drive stocks. Additionally, market
participants boosted their purchases thanks to positive reports out
of Europe and strong U.S. housing data which showed that housing
permits beat consensus estimates and continued the trend
higher.
Thanks to this, major indexes were higher across the board with
the Dow gaining 0.75% while the S&P 500 and the Nasdaq added,
respectively, 1% and 1.2% in Tuesday trading. Strong performances
were seen in much of the basic materials market, while health care,
financials, and conglomerates also gained. On the downside,
investors saw telecoms and staples slump along with utilities.
Bond and currency markets continued to tilt away from America as
the U.S. dollar index fell by about 0.50, thanks to weakness
against the euro. Meanwhile, most short-term bonds were flat but
investors did see weakness in the middle and long parts of the
curve as the 10 year note saw yields rise to the 1.62% mark.
Commodity markets, on the other hand, were more positive,
spurred by the weakened dollar and strong performances in the
agricultural market. While energy and metals were mixed, every
major agricultural product gained on the day, led by a 6.4% move
higher in orange juice, and then 4.8% moves in coffee and corn
(read USCF Debuts New Metals ETF).
For ETF trading, investors saw light volume in many of the
market’s biggest equity products while a number of sector and
leveraged sector funds also saw light activity as well. On the
other hand, currency funds, international sector products, and
country specific ETFs did see a greater level of interest than many
of their counterparts heading into mid-week trading.
In particular, investors saw a spike in interest for the
Consumer Staples Select Sector SPDR (XLP). This
product usually sees volume of about 5.4 million shares, but saw a
surge to just under 14 million during Tuesday trading (see The
Comprehensive Guide To Consumer Staples ETFs).
OptionMONSTER also noted that the product also saw a huge amount
of interest from an options perspective as well. The firm said that
a trader sold about 25,000 January puts, betting that XLP would
hold up above $32 until then (its current price is around
$34.39).
Clearly, the product which has double-digit exposure to firms
like PG, KO, and PM, is becoming an even more popular tool for
investors as the economic environment remains uncertain and these
securities hold up better than most.
Another fund that saw a big bump in volume was the
iShares MSCI Brazil Index Fund (EWZ). The ETF
usually trades about 16 million shares in a normal session but
spiked to just over 28 million in Tuesday’s session (see our free
ETF Report on EWZ).
Interestingly, investors didn’t see the same bump in other
Brazil ETFs which are more spread out among their assets like BRF,
and instead focused on EWZ and other commodity intensive funds.
This product puts more than one-third of its assets in basic
materials and energy so today’s move higher in these commodities
was a big boost for some of Brazil’s main exports and helped EWZ to
jump more than 3.65% on the day.
(see more in the Zacks ETF Center)
ISHARS-BRAZIL (EWZ): ETF Research Reports
SPDR-CONS STPL (XLP): ETF Research Reports
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