US Major Market ETFs Snap Winning Streak; FUE Jumps, GMMB Sinks

[Chart courtesy of MarketWatch.com]

US broad markets closed mostly lower Monday, meandering south as weaker-than-estimated economic data weighed on investors’ mind.

This is the year’s first monthly decline as weak consumer spending growth and the soft reading of the Chicago area business-activity index dragged markets down, though the Dow ended the month slightly higher, its longest streak since Jan 2007.

Demand for US safe-haven debts spiked over concerns of a deteriorating European sovereign crisis and slowing US economic expansion. With the all important jobs data due out on Friday, it will be interesting to see if there is more upward momentum in store or if the bulls now assume the fetal position.

Data released by the Institute for Supply Management-Chicago Inc, showed business-activity reading slipped to 56.2 in April, while a Commerce Department report showed household purchases – the biggest component of the domestic economy, grew slower at 0.3 percent after advancing 0.9 percent in the prior month.

The Dow Jones Industrial Average (DJIA) shed 0.1 percent, snapping a four-session winning run. The blue-chip index closed near flat in April, closing 0.01 percent higher over March, clocking its seventh straight month of gains. 15 stocks of the 30-component index settled higher, while 14 slipped and one ended flat.

The S&P 500 Index (SPX) skidded 0.4 percent, off 0.8 percent after four consecutive monthly wins. Telecommunications advanced the most while industrials topped the day’s decliner’s list.

The NASDAQ Composite Index (COMP) slipped 0.7 percent as Apple Inc (AAPL) dropped 3 percent following media reports on the company’s questionable taxpaying practices.

US 10-year benchmark Treasuries rose for the third day in a row as April business activity expanded at the slowest pace in more than two years, diminishing risk appetite and pushing yields lower. 10-year yield dropped 1 basis point to settle at 1.92 percent for the month, tumbling from 2.21 percent in March.

ETFs in the news:

The commodities futures-based bio-fuels product Elements MLCX Biofuels Index TR ETN (FUE) remained among the day’s top gainers, adding 10.72 percent on the day. The MLCX Biofuels Index-Total Return tracking ETN reflects the performance of fully-collateralized investments in the index.

The ETRACS Daily Short 6-Month S&P 500 VIX Futures ETN (FFVX) jumped 4.77 percent as risk remained off the table. This UBS issued so-called fear-tracking ETN is trading close to its 52 week high and may hit new highs if economic expansion slows further.

Among the day’s top losers, the Columbia Intermediate Municipal Bond Strategy Fund (GMMB) slipped 6.06 percent for the day. This Munis focused bond fund has been beating the markets in March and is currently trading close to its 52-week high.

Also the Barclays Pure Beta Cocoa ETN (CHOC) tumbled 4.55 percent as commodities lost favor with investors. CHOC tracks the Barclays Capital Cocoa Pure Beta TR Index and is trading close to its 52-week lows as agriculture related commodities continue to retreat.

Our Trend Tracking Indexes slipped slightly but remain entrenched on the bullish side. Until Friday’s jobs report hits the wires, I would expect more sideways churning, as the market is in need of new upside support, which it has not received from recently released economic data.

Disclosure: No holdings

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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