DBE Invesco DB Energy Fund

U.S. stocks slumped again in Tuesday trading as European worries and banking concerns weighed on the markets for another session. The broad S&P 500 finished lower by about 0.6% while the Dow (-0.5%), and the Nasdaq (-0.30%) both ended the day in the red as well.

In terms of sectors, it was another rough day in the energy space, although industrials, utilities, and health care also finished in the red on the day too. Financials were broadly lower—save for a decent session in beaten down JPM—while services and consumer goods were more mixed in Tuesday trading.

Once again, the U.S. dollar was a beneficiary of this equity weakness as the dollar index rose above the $81.25 level on the back of more gains against the euro and the pound. However, Treasury bonds were broadly flat on the day as the 10-year note saw yields oscillate before finishing the day flat at the 1.78% mark for intermediate term debt (read The Forgotten Municipal Bond ETFs).

Nevertheless, commodity trading was relatively mixed in Tuesday trading as crude oil fell below the $93.25/bbl. level while natural gas rose above the key $2.5/MMBtu mark. Metals again saw weakness, led by a 2.6% slump in silver, while soft commodities did finish broadly in the green led by a 2.4% rise in corn and a 2.1% move higher in Kansas City Wheat contracts.

In ETF trading, there was a great deal of activity throughout the fund world with heavy volume hitting many of the most popular equity products in Tuesday trading. Volume was also above average in many commodity funds, some of the global ETFs, and a good chunk of the basic materials market as well.

In particular, the PowerShares DB Energy Fund (DBE) saw an outsized level of trading activity during Tuesday’s session. The popular energy ETF usually sees about 115,000 shares a day but experienced a spike to about 809,000 shares during the day’s trading (read Two Energy ETFs Holding Their Ground).

Interestingly, the vast majority of this volume came thanks to two 300,000+ share blocks which both traded before 11 am as prices for the ETF slumped. Nevertheless, the fund managed to finish the day at about breakeven as large moves in various energy commodities more or less balanced each other out in what was otherwise a rocky session for many individual energy products.

Another ETF that saw a huge bump in volume was the PowerShares DB G10 Currency Harvest Fund (DBV). This currency ETF usually sees volume of about 176,000 shares in a normal session but experienced a surge to nearly 1.05 million shares during Tuesday trading (see Top Three Currency ETFs).

Surprisingly, nearly half of this volume came before 10:30 am, as a massive 634,200 block changed hands right after 10, representing the vast majority of the trading activity for the day. After that move, the product proceeded to retreat later on into the session as the U.S. dollar strengthened, while the Australian dollar and especially the Norwegian krone weakened, pushing the product down about 0.5% on the day.

(For more ETF information check out the Zacks ETF Center)

 
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