After staging the biggest single-day jump on Boxing Day since 2009, Wall Street remained volatile the day next, though it recorded a late-day recovery. After a plunge of as much as 2.8%, the S&P 500 rallied in the final minutes of trading to close at up 0.9%. The Dow Jones Industrial Average and the NASDAQ Composite advanced about 1.1 % and 0.4%, respectively (read: What Made Wall Street ETFs' Best Rally Since 2009 Possible?).
Is It a Late Santa Rally or a Dead Cat Bounce?
Stocks reeled a lot in the fourth quarter as the Fed’s policy tightening, renewed global growth worries, an oil price slump, heightened trade tensions between the United States and China, fears of peaking U.S. economic growth, and finally the government shutdown dealt a blow to the market.
President Donald Trump's unfriendly stance over Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin's sudden statement on the U.S. banks’ healthy liquidity left some investors confused.
With most of the concerning factors remaining in place, investors have every reason to be in two minds. Market experts are advising caution despite the slot rebounds in the United States and Japan. The markets have been gaining probably “in the absence of more bad news.”
Global economic news and indications have been mixed. Though weekly jobless claims were lower, giving an assuring cue, expectations for job growth, as measured by the monthly consumer confidence index, plunged to a five-month low. In China, industrial profits declined in November for the first time in three years, reinforcing global growth fears.
All these make the longevity of the latest Wall Street rally uncertain. And thus, investors are not giving up their bets on relatively safe investments like alternative ETFs or dividend ETFs. As a result, some alternative ETFs saw outsized volume on Dec 27 while remaining in the green (read: Dividend ETFs in Spotlight As Stocks Continue Whipsawing).
iShares Core Moderate Allocation ETF (AOM - Free Report) : Volume 3.24 times average
This total portfolio ETF was under the microscope on Dec 27 as about 1.29 million shares changed hands. This compares to the average trading volume of around 397,600 million shares. It gained 0.2% on Dec 27.
iShares Core Conservative Allocation ETF (AOK - Free Report) : Volume 3.74 times average
The fund measures the performance of an asset allocation strategy targeted to a conservative risk profile. The fund was in the spotlight on Dec 27 as 592, 083 shares moved hands compared with an average of roughly 158, 230 shares a day. The fund was up 0.2% on Dec 27.
SPDR SSGA Global Allocation ETF (GAL - Free Report) : Volume 3.15 times average
The fund is a basket of U.S. and international equities as well as fixed income products. About215,016 shares of GVAL changed hands on Dec 27. This compares to the average trading volume of around 68,270 shares. It advanced 0.3% on Dec 27.
Invesco Defensive Equity ETF (DEF - Free Report) : Volume 3.67 times average
The underlying index is designed to provide exposure to securities of large-cap U.S. issuers. The find was in the spotlight on Dec 27 as 88,199 shares moved hands compared with an average of roughly 24,040 shares a day. It added 1.7% on Dec 27.
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