US equity ETFs surged Monday, erasing a week’s losses after Federal Reserve Chairman Ben Bernanke expressed concern over the job market momentum sustainability and reaffirmed further liquidity injection if necessary.
30-year bond yields rose the most in a week after Bernanke hinted at continuing the record low interest rates, boosting bets that inflation will move north supporting the case for gold. The number of customers signing up for previously owned homes remained at an almost two-year high, data released by the National Association of Realtors showed.
The Dow Jones Industrial Average (DJIA) jumped 160.90 points to 13,241.63, its biggest rise since Jan 3 when the index climbed 180 points. Only one of the 30 components fell on the Dow while the S&P 500 Index (SPX) added 19.40 points to close 1416.51, with consumer discretionary, technology and healthcare advancing the most.
The tech-heavy NASDAQ Composite (COMP) rose 1.8 percent to close at 3122.57, its highest level in more than a decade.
Yield on US ten-year notes rose 0.01 percent to 2.25 percent, the highest since December 2010. 30-year bonds yields jumped three basis points to 3.34 percent.
ETFs in the news:
The Market Vectors Junior Gold Miners ETF (GDXJ) advanced 4.3 percent for the day, as gold progressed on Bernanke’s comments on expansionary monetary policy in future. The yellow metal has struggled recently as the Fed chief had remained non-committal on the possibility of QE3.
The iShares MSCI Turkey Investable Market Index Fund (TUR) made a strong comeback today, adding 3.31 percent on the day, after tumbling last Tuesday.
The Global X Uranium ETF (URA) added 2.5 percent for the day, retracing some of last week’s losses as worries over market-correlated assets subside.
The iShares Russell 2000 Growth ETF (IWO), holding small-cap firms, moved 2.18 percent on the day as risk sentiments improved.
Among the day’s biggest losers, the iPath Dow Jones UBS Natural Gas Subindex Total Return ETN (GAZ) slumped by another 16.81 percent Monday. The funds premium has reversed, and it is closely following the underlying index now.
Another premium-loaded fund, the VelocityShares Daily 2X VIX Short Term ETN (TVIX) also shed 17.88 percent for the day.
The investor-fear tracking Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) slipped 9.43 percent, as worries virtually vanished from the market following Bernanke’s dovish statement today.
Our Trend Tracking Indexes (TTIs) followed the indexes higher and further into bullish territory. As of today, they have reached the following positions relative to their respective long-term trend lines:
Domestic TTI: +5.37%
International TTI: +6.63%
Disclosure: Holdings in TUR
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