Courtesy of John Nyaradi.
Markets and ETFs paused in limbo today as investors await Fed and Euro action
Markets and major index ETFs paused today as the S&P 500 lowered .1%, the Dow Jones lowered .26%, the NASDAQ ticked up .09% and the Russell 2000 increased .67%. Major index ETFs reacted in the same fasion as the SPDR S&P 500 ETF (NYSEARCA:SPY) dropped .09%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) dropped .3%, the PowerShares QQQ Trust, Series 1 ETF (NASDAQ:QQQ) gained nearly 1%, and the iShares Russell 2000 Index ETF (NYSEARCA:IWM) gained .46%.
Major markets and major index ETFs likely stood in limbo yesterday and today as investors anticipate the Fed meeting tomorrow and a Greece private debt solution; both events have significant economic ramifications no matter the outcome.
Dr. Bernanke and his Fedsters are holding their standard FOMC Meeting tomorrow, however the real stickler is Dr. Ben’s press conference afterwards, in which the Feds will disclose their short term interest rate plans AND the projected dates to raise interest rates again. Rumors surrounding the date of the first rate hike are as far out as July 2014, which would be historic by any account.
Greece is now back in the spotlight but definitely not in vogue, as officials and Grecian private bond holders continue haggle over how much debt to write down. If an agreement does not come to pass, Greece will default in March, and currently talks about writing down debt have stalled. Meanwhile, Chancellor Merkel has apparently accepted a higher IMF bailout fund under the condition of tighter debt controls in the European Union. Not surprisingly so, Europe ETFs dropped today on this continuing drama.
Let us also not forget the US versus Iran “nuclear-weapons-close-Strait-of-Hormuz” issue which has yet to resolve itself; oil (NYSEARCA:USO) dropped .50% today and closed at just over $99 per barrel. Our precious gold also dropped .65% today to $1664.5 per ounce, most likely in anticipation of Dr. Ben’s speech.
And lastly, at the time of this writing, Apple Inc, (NASDAQ:AAPL) released its fourth quarter 2011 results; the tech company’s profit jumped 73% compared to Q4 of 2010. I would expect a huge surge tomorrow for tech ETFs including the Technology SPDR ETF (NYSEARCA:XLK) and the PowerShares QQQ Trust, Series 1 ETF (NASDAQ:QQQ).
Bottom Line: Simple for today, as major indices and index ETFs stand in limbo as investors await tomorrow’s Fed news and a Grecian-Euro solution. The tech sector should also pop tomorrow, as Apple (NASDAQ:AAPL) always makes a large splash.
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