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Wall Street saw a glum start to the second quarter, as stocks tumbled to record lows amid continued pessimism in the market. Equities traded lower after a long weekend as China announced retaliatory measures to President Trump’s tariffs and Trump continued to attack Amazon.com.
Safe havens had a good start to the quarter as investors avoided declining equities to reallocate their portfolios and counter high volatility (read: Winning ETF Areas of March).
What’s Driving Markets?
All S&P 500 sectors closed lower on Apr 2, with the Consumer Discretionary and Tech sectors losing the maximum, as losses from Amazon (AMZN - Free Report) and Tesla (TSLA - Free Report) coupled with trade war fears dampened investor sentiments.
Moving on to trade, tensions between Washington and Beijing have escalated. Trump has imposed tariffs on around $60 billion worth of Chinese imports of IT, telecom and consumer products, in response to China’s violation of intellectual property rights. In a latest show of retaliatory force, China’s ministry of commerce said it would be imposing tariffs of up to 25% on 120 U.S. food products worth $3 billion.
Now, shifting our focus to Wall Street, Trump has continuously attacked Amazon’s policies. “Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country….not a level playing field,” Trump tweeted on Monday.
Trump has been a critic of the rates charged by the postal service to deliver Amazon packages. Per a Fortune.comarticle, packages delivered by the postal service cost Amazon about half of what it would have to pay Fedex or its peers. Moreover, per a Citigroup report, an increase in postal service rates will cost Amazon an additional $2.6 billion a year. As a result, Amazon’s stock declined 5.2% at market close on Apr 2.
Nasdaq closed 2.7% lower, while the S&P 500 was dragged 2.2% down and the Dow suffered a 1.9% decline. Shares of Tesla were down 5.1% after reports of the company falling back in its Model 3 production schedule. An unverified memo cited Tesla producing 2,000 Model 3 vehicles a week, lower than its 2,500 target.
This added to the company’s woes, as it battles a recent crash of a Tesla Model X resulting in a fatality. The company reported that at the time of the accident, its partial autonomous driving system had been activated. Moreover, Tesla recalled 123,000 of its Model S vehicles, citing an issue with the power steering.
This fund offers physical exposure to gold. It seeks to track the performance of the gold bullion and might turn out to be a cost-efficient way of gaining exposure to the commodity even after accounting for the fund’s expenses.
It has AUM of $36.2 billion and charges a fee of 40 basis points a year. It has returned 2.9% year to date and 7.2% in a year.
This fund seeks to provide exposure to intermediate term U.S. Treasury bonds.
With $8.2 billion in AUM, it charges a fee of 15 basis points a year. It has an effective duration of 7.56 years and a weighted average maturity of 8.37 years. The fund has lost 0.5% in a year and 2.0% year to date.
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Safe Haven ETFs to Buy Amid Extended Selloff
Wall Street saw a glum start to the second quarter, as stocks tumbled to record lows amid continued pessimism in the market. Equities traded lower after a long weekend as China announced retaliatory measures to President Trump’s tariffs and Trump continued to attack Amazon.com.
Safe havens had a good start to the quarter as investors avoided declining equities to reallocate their portfolios and counter high volatility (read: Winning ETF Areas of March).
What’s Driving Markets?
All S&P 500 sectors closed lower on Apr 2, with the Consumer Discretionary and Tech sectors losing the maximum, as losses from Amazon (AMZN - Free Report) and Tesla (TSLA - Free Report) coupled with trade war fears dampened investor sentiments.
Moving on to trade, tensions between Washington and Beijing have escalated. Trump has imposed tariffs on around $60 billion worth of Chinese imports of IT, telecom and consumer products, in response to China’s violation of intellectual property rights. In a latest show of retaliatory force, China’s ministry of commerce said it would be imposing tariffs of up to 25% on 120 U.S. food products worth $3 billion.
Now, shifting our focus to Wall Street, Trump has continuously attacked Amazon’s policies. “Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed. Also, our fully tax paying retailers are closing stores all over the country….not a level playing field,” Trump tweeted on Monday.
Trump has been a critic of the rates charged by the postal service to deliver Amazon packages. Per a Fortune.com article, packages delivered by the postal service cost Amazon about half of what it would have to pay Fedex or its peers. Moreover, per a Citigroup report, an increase in postal service rates will cost Amazon an additional $2.6 billion a year. As a result, Amazon’s stock declined 5.2% at market close on Apr 2.
Nasdaq closed 2.7% lower, while the S&P 500 was dragged 2.2% down and the Dow suffered a 1.9% decline. Shares of Tesla were down 5.1% after reports of the company falling back in its Model 3 production schedule. An unverified memo cited Tesla producing 2,000 Model 3 vehicles a week, lower than its 2,500 target.
This added to the company’s woes, as it battles a recent crash of a Tesla Model X resulting in a fatality. The company reported that at the time of the accident, its partial autonomous driving system had been activated. Moreover, Tesla recalled 123,000 of its Model S vehicles, citing an issue with the power steering.
Let us discuss a few ETFs that investors look at during times of high market uncertainty (read: Tackle Market Uncertainty With These 3 Quality Dividend ETFs).
CurrencyShares Japanese Yen Trust (FXY - Free Report)
This ETF seeks to provide exposure to the Japanese yen.
It has AUM of $185.0 million and charges a fee of 40 basis points a year. It has returned 6.3% year to date and 4.6% in a year.
CurrencyShares Swiss Franc (FXF - Free Report)
This ETF seeks to provide exposure to the Swiss franc.
It has AUM of $162.8 million and charges a fee of 40 basis points a year. It has returned 1.8% year to date and 3.7% in a year.
SPDR Gold Shares ETF (GLD - Free Report)
This fund offers physical exposure to gold. It seeks to track the performance of the gold bullion and might turn out to be a cost-efficient way of gaining exposure to the commodity even after accounting for the fund’s expenses.
It has AUM of $36.2 billion and charges a fee of 40 basis points a year. It has returned 2.9% year to date and 7.2% in a year.
iShares 7-10 Year Treasury Bond ETF (IEF - Free Report)
This fund seeks to provide exposure to intermediate term U.S. Treasury bonds.
With $8.2 billion in AUM, it charges a fee of 15 basis points a year. It has an effective duration of 7.56 years and a weighted average maturity of 8.37 years. The fund has lost 0.5% in a year and 2.0% year to date.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>