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ETF News And Commentary

Eric Dutram

ETF Trading Report: MLP, Social Media ETF In Focus

MLPN SOCL

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All eyes were on the IPO of Facebook during Friday trading as the company’s shares opened around $42.05 after a $38 pricing. Still, despite the hype, investors failed to push the shares of the social media giant higher on the day as the company finished trading around the $39/share level.

Overall, the broad market wasn’t much better as all the major benchmarks finished the day in the red. The Dow tumbled by 0.6% while the S&P 500 finished lower by 0.7%. Meanwhile, the tech-heavy Nasdaq saw the bulk of the selling as the index fell by 1.2% on the day (read Invest Like the 1% with These Three ETFs).

Losses were pretty widespread among the sectors as health care, big banks and some large tech names led on the downside. One of the bigger slumps on the day came in Google—down 3.6%-- although Yahoo did see some much needed strength on the session, adding about 3.7% to its total.

Despite the market weakness, the dollar was lower on the day, as the U.S. Dollar Index finished the session just above the key $81 mark. Additionally, there was minimal interest in more safe haven buying as the ten year finished the day flat, sporting a yield of 1.71%.

With this backdrop, commodities were broadly mixed across the board although crude continued to fall while natural gas added another 4.7% to close out the week. Soft commodity trading was decidedly positive, led by strength in many grains, while gold and silver bounced back in Friday trading as well.

In ETF trading, the market was again active across many of the industry’s top products as these funds once again saw trading that was above observed average volume levels. This was especially apparent in some of the U.S. sector funds, a couple emerging market ETFs, and large cap style ETFs.

In particular, the Credit Suisse Cushing 30 MLP ETN (MLPN - ETF report) saw a huge spike in volume on the day. The product usually trades around 93,000 shares but experienced a jump to just over 600,000 to close out the week (read Oil Bull Market Is No Place For MLP ETF Investors).

Still, the product slumped by 1.7% on the day although the strong dividend of nearly 5.5% seems likely to cushion the blow for many investors. Additionally, it is worth noting that the vast majority of the volume in this note came in the final hour of the session on one trade.

At this trade, which consisted of a 527,000 share block, the product was at its low point for the day and then proceeded to move higher by a few cents to close out the week. Clearly, a huge investor had great timing—or had the ability to move the market—in what was one of the final trades of the week for this increasingly popular product.

Another ETF that was saw a great deal of trading volume on the day was unsurprisingly the Global X Social Media Index ETF (SOCL - ETF report). The product usually sees about 32,000 shares change hands in a normal session but, thanks to the FB halo effect, experienced a surge to 410,000 shares in Friday trading (read Social Media ETFs: Time to Buy?).  

Obviously the debut of FB on the market played a huge role in the increased interest in this fund during the day, especially given how poorly many of the component securities reacted. In fact, SOCL finished the day down close to 6.8%, within striking distance of the low for the product.

(see more in the Zacks ETF Center)

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