[Chart courtesy of MarketWatch.com]
US equity ETFs retreated Tuesday, while the Dow inched towards its four-month low as developments from eurozone kept investors edgy despite steady economic numbers from the home-front.
US retail sales grew by 0.1 percent in April, while CPI reading changed little for the month. The New York Empire State Index showed manufacturing bounced bank in May, zooming to 17.1 in May from 6.6 in April.
US Treasuries yields traded close to seven-month lows, with the 10-year benchmark yields rising slightly after European statistics office reported little GDP growth in the region in Q1, beating a 0.2 percent contraction forecast.
The Dow Jones Industrial Average (DJIA) lost 63.35 points, the index’s ninth loss-session in the last ten days. The S&P 500 Index (SPX) dropped 7.69 points to settle at 1330.66 while the tech-heavy NASDAQ Composite Index (COMP) dropped 8.82 points to 2893.76, the lowest since early February when Stocks came under pressure in the final hour after Greek President Karolos Papoulias’ office announced fresh elections next month, diminishing investors’ risk appetite.
Demand for US assets softened earlier after a report from the EZ showed Germany expanded by 0.5 percent against an expected 0.1 percent, while Europe managed to avoid a recession—so far. The benchmark 10-year Treasury yield climbed one basis point to 1.77 percent, after touching 1.76 percent, the least since Oct. 4.
ETFs in the news:
The Barclays iPath S&P 500 VIX Short-Term Futures ETN (VXX) rallied, jumping an impressive 5.31 percent as Greece continued to spook the markets. As volatility across global markets increased, the fear-tracking VIX index briefly touched a multi-month high of 22.7 as the session headed to a close. The ProShares VIX Short-Term Futures ETF (VIXY) also soared, rising 5.13 percent for the day.
Among the day’s top losers, gold miners bled heavily as the yellow metal continued to witness prolonged weaknesses. The Global X Gold Explorers ETF (GLDX) plummeted 8.27 percent as more investors chose bullion-backed ETFs rather than miners/explorers.
Both gold and silver explorers are seeing investor indifference with the Global X Silver Miners ETF (SIL) sinking 5 percent today. Other mining related products like the Van Eck Market Vectors Gold Miners ETF (GDX) fell for the second day in a row, shedding 4 percent for the day. GDX has lost about 23 percent since the beginning of the year. One look at a chart confirms that these ETFs are deeply stuck in bear market territory.
Weakness has set in for our Trend Tracking Indexes (TTIs) as well, although at much lesser magnitude—so far. Our International TTI confirmed yesterday’s sell signal by moving further below its long-term trend line (-2.40%).
Domestically, we are still on the bullish side of the dividing line by +2.71%. However, several sell stops in our ETF Model Portfolios were triggered over the past few days. Be sure to view the latest update, which will be posted tomorrow morning at 6 AM PST.
Disclosure: No holdings