Courtesy of John Nyaradi.
The ETF and Wall Street Party continued today with Tech Sector and Financial Sector ETFs leading the way
The ETF party continued today as major indices including the S&P 500, NASDAQ, Dow Jones, and Russell 2000 all added at least .4% on top of yesterday’s gains. The major indicex ETFs also grew, with the SPDR S&P 500 ETF (NYSEARCA:SPY) adding .52%, the PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ) adding .62%, the SPDR Dow Jones Industrial Average ETF NYSEARCA:DIA adding .44% and the iShares Russell 2000 Index ETF (NYSEARCA:IWM) adding .62%. The growth was likely generated by positive economic reports, positive earnings reports from Tech Sector and Financial Sector companies, and rumors about a possible Trillion Dollar Fed intervention.
The Tech Sector and Financial Sector were the life of today’s party as the Financial Select Sector SPDR ETF (NYSEARCA:XLF) and the Technology SPDR ETF (NYSEARCA:XLF) finished in green after Bank of America (NYSE:BAC) reported 11% earnings for fourth quarter and Google (NASDAQ:GOOG) reported 6% earnings for fourth quarter. Google (NASDAQ:GOOG) released its earnings after market close, so it is likely that NYSEARCA:XLF will continue its rise tomorrow.
Economic indicators also contributed to the market party as initial jobless claims witnessed a sharp decline and the Consumer Price index stayed relatively flat. Even though the US Economy is growing slowly again, at least it is still growing.
Possibly the largest driver of today’s markets was a rumor about Fed plans to buy up $1 Trillion worth of mortgage backed securities in an attempt to jump start the housing market and economy. Apparently the alleged QE3 is spurred by a possible European recession and a notion that the US recovery, as it stands today, is not sustainable. Either way, markets today ate this news up, and if this rumor actually does come to pass, watch out, more free money! Gold investors beware as well, because it will be harder and harder to figure out where to place your money if indeed the “fiat” currencies come back in vogue.
Bottom Line: Today’s markets are on a bullish trend for now as the tech and financial sectors lead the way with greater profits. Europe still remains the monster under the bed and has the capacity to destroy the world if let out of control. Regardless, the Fed will apparently decide to step in again and bail out the economy for the third time against tough political and economic pressure, all in an attempt to ease our country through this mess. Let us hope it works.
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