Well, we already know that the U.S. economy is slowing down after the most recent GDP report indicated punkish growth @ +0.5%. The employment situation seems to be the only solid pillar standing. So if there are plenty of people with jobs, someone should tell Disney (DIS), which reported less than expected earnings results, and Macy’s (M) or Fossil (FOSL), two important retailers who reduced their full year forecasts. Given that less than 15% of America’s GDP is derived from exports, any signs of contraction in consumer and retail oriented industries is not something the market takes lightly. And, it didnt…
In equities, all of the major indexes were down, with the exception of Brazil (EWZ) and Latin America 40 (ILF). Japan (EWJ) was the biggest laggard. Not suprising, Consumer Discretionary (XLY) was today’s biggest loser @ -2.01% and Volatility or the VIX (VXX) led the day and the way @ +3.44%.
Commodities was the top performing asset class as the US Oil Fund (USO) @ +3.18% and DB Commodity Index (DBC) @ +2.33% put in impressive gains. Bonds were relatively stable while the US Dollar (UUP) succumbed to profit taking. Real Estate, however, could not escape the collateral damage of negative sentiment towards retail consumers. The DJ Real Estate Index (IYR) and Residential Real Estate (REZ) both made key bearish reversals.
(Please see our ETF asset class performance summary below)