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ETF News And Commentary

U.S. equity markets rose during Tuesday trading as strong housing data carried shares higher on the day. In the latest release of the S&P Case Shiller Home Price Index, the 20-City seasonally adjusted figures rose by 0.7%, crushing the consensus which called for a 0.4% rise. Meanwhile, the non-seasonally adjusted year-over-year figures showed a -1.9% decline, beating out estimates on this metric as well.

Thanks to this, investors were able to shrug off some lukewarm consumer data and push the Dow higher by about 0.3%, the S&P 500 up 0.5%, and the Nasdaq to a 0.6% gain. The gains were concentrated in the basic materials, banking, and services sectors, while consumer goods, industrials, and tech led on the downside for Tuesday trading (read Is MFLA the Worst ETF in the World?).

In currency trading, the U.S. dollar was pretty much flat against the world’s major currencies, while the biggest moves came in the resource currencies as the AUD/USD pair added about half a percent while the USD/CAD pair fell by a similar amount. Bond trading was similarly flat, although investors did see some outflows in the longer part of the curve as both the 10 and 30 year Treasury bonds added three basis points in yield on the session.

Commodity markets also cooled off a bit, although most products did trend into the green. The notable exceptions to this were in the precious metals market while on the upside, corn continued its impressive run as Brent crude and natural gas also added a few percentage points on the day as well.

ETF trading was relatively light across the board, led by more weak volume sessions in many of the country’s most famous products. Especially weak was in the big broad market funds and those focused on the materials space, while outsized trading volume was seen in some of the U.S. sector products and a few international ETFs as well.

In particular, investors saw a pop in interest for the iShares MSCI United Kingdom Index Fund (EWU - ETF report). This product usually trades about 1.45 million shares in a normal session but saw a spike to 4.3 million today (read UK ETF Investing 101).

This bump in volume came as EWU added about 1% on the session as the product outpaced many of its mainland cousins both in terms of volume increases and performance. The ETF was also probably assisted by the heavy basic materials/energy contingent in the fund, something that many other European ETFs do not have, helping EWU to lead the space higher on Tuesday trading.

Once again in focus was also the PowerShares DB Agricultural Fund (DBA - ETF report) which sees about 777,000 shares change hands in a normal session, but spiked to 3.4 million in Tuesday’s trading. A number of other ETFs in the agricultural commodity space also saw increased interest on the day, although this was especially the case for the grain commodity focused products in the segment (also read USAG In Focus As Agricultural Commodity ETFs Soar).

Clearly, the space is still under the microscope thanks to the extreme volatility in the ag market, largely due to the recent bout of hot weather. This has pushed many grains up to high levels in recent trading days as the weather has wilted crops around the region. Seemingly, investors are using DBA and similar products in order to make a play on this trend going forward into July.

(see more on ETFs at the Zacks ETF Center)

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