What ETFs Are Doing Ahead of Fed Meeting | ETF Trends

Most exchange traded funds (ETFs) are keeping gains tempered this morning as the markets await word about what the Federal Reserve will do about interest rates. While they wait, investors seem to be taking comfort in a solid retail report.

  • The Commerce Department reported U.S. retail sales increased 0.8% in November, up for a fifth consecutive month. The Labor Department said U.S. wholesale costs also climbed 0.8% in November. First Trust Consumer Staples AlphaDEX (NYSEArca: FXG) is up a scant 0.3% so far today.
  • The markets are awaiting a decision on monetary policy from the Federal Reserve, due today at 2:15 p.m. Eastern. The central bank is expected to temper expectations of a rate hike. If optimism in the economy is expressed, it could be bullish for the U.S. dollar. Watch PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP) after the announcement.
  • The Associated Press reports the European Central Bank has stepped up its bond purchases over the past couple of weeks. By buying up the bonds of vulnerable countries like Greece, Ireland, Spain or Portugal the ECB stabilizes their prices and yields, or interest rates. Those rates indicate how much a government would have to pay if it were to raise money in the debt markets. SPDR Barclays Capital International Treasury Bond (NYSEArca: BWX) is down slightly this morning.
  • Asian equity markets advanced Tuesday, with South Korean shares ending at their highest level in more than three years as Hyundai Heavy Industries led shipbuilders higher on a big new order. Metal and energy shares also advanced across the region as a weakened U.S. dollar boosted commodity prices. Vanguard Pacific Stock ETF (NYSEArca: VPL) is up 0.5% so far this morning.
  • On the corporate front, shares of Amgen Inc. (NASDAQ: AMGN) are up almost 4% today after the biotechnology firm said late Monday that a study of its bone drug Xgeva showed it helped prostate-cancer patients live longer without the disease spreading to their bones. iShares NASDAQ Biotechnology (NYSEArca: IBB) is up 0.7% following the announcement; AMGN is 8% of the ETF.

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.