Wall Street hardly waited for its coffee to kick in before a slew of news began sending stocks and exchange traded funds (ETFs) this way and that in a series of chain reactions.
- The dollar weakened to $1.50 against the euro, setting yet another record and crossing what’s considered to be a psychologically important barrier. It’s the weakest position since the 15-country currency was launched in 1999, reports Carter Dougherty for the New York Times.
- The news of our weakening currency drove the price of gold and oil to new highs, according to Pratima Desai for Reuters. The spot price of gold went as high as $964.70 an ounce, and oil surged above $102 a barrel. Its inflation-adjusted peak of $102.53, reached in 1980, is in the crosshairs.
- The government lifted caps on the investment portfolios for mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE).
The move is expected to increase liquidity in the mortgage industry.
That’s after Fannie Mae dished some bad news this morning: it had a
$3.6 billion quarterly loss, which was worse than expected, Reuters reports. In midday trading, Fannie Mae’s shares were up nearly 3%, boosted by the government’s report. Earlier in the morning, its shares dipped to a 12-year low.
- With that, Federal Reserve Chairman Ben Bernanke indicated that the Fed is open to yet more rate cuts to continue its attempts to stimulate the economy, says Joe Bel Bruno for the Associated Press. It meets again on March 18, and a growing consensus believes that rates will be slashed by another half-point.
Some of the ETFs related to all this activity could be seeing some movement today:
- CurrencyShares Euro Trust (FXE)
- iShares Dow Jones US Real Estate (IYR)
- United States Oil (USO)
- streetTRACKS Gold Shares (GLD)
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.