Economic Data, Upbeat Forecast Lift ETFs | ETF Trends

Exchange traded funds (ETFs) rose sharply Thursday as a round of economic data and an upbeat forecast from shipper FedEx Corp. helped the market rebound after three straight declining sessions.

  • Oil prices soared more than 3.5 percent, climbing back above $101 per barrel after a crackdown on protesters in Bahrain and the U.S. pressed for U.N. action against Libya’s Moammar Gadhafi. Prices also rose on the expectation that Japan will boost fuel imports as it recovers from its earthquake and tsunami disaster. And the world’s largest oil consumer, the U.S., reported that unemployment claims dropped to the lowest level since July 2008, raising hopes that oil and gasoline demand will soon increase. Oil prices have been pushed and pulled in recent weeks by international crises that could have major impacts on world oil supplies and demand. The Direxion Daily Energy Bull 3x Shares ETF (NYSEArca: ERX) jumped almost 9% today.
  • A private research group’s measure of future economic activity rose 0.8%  in February, as the job market showed improvement and consumers were more optimistic. It’s the eighth consecutive month that the Conference Board’s index of leading economic indicators has shown growth.  Although data points to an improving economy, rising food and energy prices could affect economic growth, said Conference Board economist Ken Goldstein in a statement. Eight of the 10 components in the Conference Board’s index increased last month, led by a measure of interest rates that has historically pointed at a quickening economy and rising prices. That measure is the difference between 10-year Treasury yields and the overnight bank lending rate the Federal Reserve is keeping at zero. The iShares Barclays 7-10 Treasury ETF (NYSEArca: IEF) ended slightly lower.
  • Manufacturing in the Philadelphia region expanded in March at the fastest pace since 1984 as factories received more orders. The Federal Reserve Bank of Philadelphia’s general economic index rose to 43.4, exceeding the highest estimate in a Bloomberg News survey of economists, from 35.9 the prior month. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. Rising exports to emerging economies such as China, along business investment and inventory rebuilding are generating bigger gains in factory production. The figures underscore the Fed’s view that the economic expansion is on “firmer footing.” The PowerShares DB Base Metals Double Long ETF (NYSEArca: BDD) closed 6% higher on Thursday.
  • FedEx Corp. (NYSE: FDX) gave a robust fourth-quarter profit outlook Thursday that was bolstered by higher base prices, greater fuel surcharges and an increase in shipping volumes across all its businesses. “The dynamics of global trade appear solid, although the impact of volatile fuel prices and other global events remains uncertain,” said Chairman and Chief Executive Fred Smith, on a call with analysts.  FedEx is seeing strong margin improvement in its ground operations and improving margins at express and freight, said Standard & Poor’s Equity Research analyst Jim Corridore. Shares of FedEx climbed approx 3% today. The iShares Dow Jones Transportation Average ETF (NYSEArca: IYT) rose 1.5% today.

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.