Japan is weaker, Asia and the U.S. are volatile this week as global markets adjust to central bank actions. Asian stocks sold off for the week after a 7% drop in Japanese share prices last Tuesday sparked selling in the region. The sell-off was attributed to the Chinese Purchasing Managers’ Index (PMI) and concerns about the U.S. Federal Reserve changing its current easing policies sooner than expected. While shares recovered some of the gains the following day, stocks in the region have been volatile. The
NASDAQ ASPA INDEX (NQASPA) fell 4.9% over the past five days.
“Markets that are fueled to some degree by central banker actions can be subject to quick reversals with sudden changes in sentiment, especially if the underlying fundamentals have not been altered by the central bank’s actions,” said Dave Gedeon, Managing Director, NASDAQ OMX Global Indexes. “The sell-off in Japan last week is evidence of the velocity of moves in stocks, even if news is presumed to be priced in. With that being said, Japan’s outsized move did not have a significant impact on other markets, as the U.S. remained relatively flat during this period.”
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Strong earnings reports from key companies in the Green Economy sparked a rally in the NASDAQ OMX Green Economy Index (QGREEN) this week, leading equities markets higher. Meanwhile, silver and gold remained under pressure with the PHLX Gold/Silver Sector Index (XAU), a measure of gold and silver mining stocks, dropping 3.8%.
”Precious metals have experienced volatile trading this week, dropping to its lowest level in two and a half years,” said Dave Gedeon, Managing Director, NASDAQ OMX Global Indexes. “Changing inflation expectations and sustained strength in the U.S. Dollar has curbed the demand for gold and silver as a long-term investment vehicle.”
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Investor inflows into exchange traded funds (ETFs) tracking the biotechnology sector have surged as the share prices of biotech companies make a record breaking start to 2013. According to FT.com, the largest vehicle in the sector, the iShares NASDAQ biotechnology fund (IBB), based on the NASDAQ Biotechnology Index (NBI), has registered inflows of $311.5M so far this year, already surpassing the $287.8M it gathered over the whole of 2012.
IBB has risen 32.6 percent this year, outperforming the second largest fund in the sector, State Street’s SPDR S&P biotech ETF, known as XBI, which is up 25.2 per cent. XBI has attracted $40.8m in new inflows in 2013, up from $24.9m over the whole of last year.
U.S. stocks have continued to move higher, with all-time closing highs in the Dow Jones Industrial Average and S&P 500 indices yesterday. Biotechnology stocks have been particularly strong, as have home builders and healthcare stocks. The NASDAQ BIOTECHNOLOGY INDEX (NBI) was up 6.6% over the past 5 days and is up over 35% year-to-date.
"Biotech stocks have been helped by signs of a more accommodating U.S. approvals process and several companies reporting positive news. The tailwinds from the recent market rally are helping the sector as investors look to allocate funds to non-defensive sectors," said Dave Gedeon, Managing Director, NASDAQ OMX Global Indexes. "The housing sector stocks were strong again this week, with a gain of almost 3% after a 4.4% rise last week."
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The very first cross-border exchange-traded fund (ETF) in China launched on May 15. The ETF will be based on the NASDAQ-100 Index, providing Chinese investors access to 100 of the world's largest and most dynamic non-financial companies, based on market cap.
This is a significant milestone both for the growing global ETF landscape and for the increasing diversification of China's capital markets. The China Securities Regulatory Commission, the Shanghai Stock Exchange and Guotai Asset Management have paved the way for individual and institutional investors in China to trade an innovative investment solution that has not been previously available.
The Guotai NASDAQ-100 Exchange Traded Fund is listed on the Shanghai Stock Exchange.
We couldn't be more pleased with this development as a testament to NASDAQ OMX's prominence in the region. Read the press release, or visit our website to view the NASDAQ-100's performance history.
Index Universe named the First Trust NASDAQ Clean Edge Green Energy ETF (NASDAQ: QCLN) and the iShares NASDAQ Biotechnology Index Fund (NYSEArca: IBB) two of the best ETFs in 2013. According to the publication, QCLN is challenging the db X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) for first position in a tally of top-performing ETFs year-to-date, with gains of 37.3 percent, and all of that linked to shares of Tesla, the luxury electric sports car maker. QCLN is based off of the NASDAQ Clean Edge Green Energy Index.
IBB, the biggest and oldest biotech-focused ETF in the market, has $3.15 billion in assets gathered since its 2001 launch and has tagged on gains of 27.45 percent year-to-date, making it the ninth-best-performing ETF of 2013 so far, according to the article. It goes on to say "IBB is rising as successful treatment launches and what some see as a more 'accommodating' U.S. approvals process for new drugs fuel the biotech sector." IBB is based off of the
NASDAQ Biotechnology IndexRead the entire article here.
