SPY bounced back
On Monday, December 21, 2015, the SPDR S&P 500 ETF (SPY) and the Direxion Daily S&P500 Bull 3X ETF (SPXL) rose by 0.8% and 2.8%, respectively. After last week’s sell-off in all major sectors, US stocks rebounded on Monday as investors ignored the fall in crude prices. We’ll take a look at the reasons behind falling oil prices through our series. The following graph presents a snapshot of the market as of December 21, 2015.
Here, the US dollar is represented by the PowerShares DB US Dollar Bullish ETF (UUP), oil is represented by the United States Oil Fund (USO), and gold is represented by the SPDR Gold Trust (GLD). The Treasury bond market is represented by the iShares 20+ Year Treasury Bond (TLT) while volatility is represented by the Volatility S&P 500 Index.
The US dollar fell on the day as the CFNAI (Chicago Fed National Activity Index) for November 2015 came in at -0.30 as compared to the prior reading of -0.17. The figure was less than the lower end of the estimated range and points toward economic growth that’s below average. Weak exports were held as the key contributor to the negative reading for the month. On the other hand, yields on government bonds rose on Monday, December 21.
With the fall in the US dollar, both industrial and precious metals gained on the day. Gold rose even though the volatility was sharply low on Monday. The rise in metal ETFs was followed by gains in the miners’ ETFs. As a result, mining stocks advanced on December 21, 2015, with Freeport-McMoRan (FCX), Nucor (NUE), Alcoa (AA), and Allegheny Technologies (ATI) yielding 0.5%, 2.2%, 1.0%, and 1.8%, respectively, on the day.
Next, let’s look at the sector-wise performances of the component sectors of the SPDR S&P 500 ETF (SPY) as of December 21.