ETFs Mixed with Japan Quake and Economic Data | ETF Trends

Exchange traded funds (ETFs) wavered in morning trading after a massive earthquake hit Japan.  Many are predicting the impact will be minimal on the global economy.

  • Japanese stocks fell sharply in late trading on Friday after a powerful earthquake rocked the country’s northern coast, triggering a tsunami and generating tremors that shook buildings in Tokyo. News of the quake, which struck in the closing minutes of stock market trading in Tokyo, accelerated a fall caused after hefty overnight losses on Wall Street and amid lingering worries over the political turmoil in the Middle East. The quake — the worst ever in Japan since at least 1891 — had a magnitude of 8.9 and its epicenter was 231 miles northeast of Tokyo, according to the U.S. Geological Survey. Tsunami warnings were also issued for many other countries, including Mexico, New Zealand, Indonesia, Taiwan and the western coast of the U.S. The iShares MSCI Japan Index (NYSEArca: EWJ) was down 1.6% in early trading.
  • Shoppers snapped up new cars, clothing and electronics in February, pushing retail sales up for the eighth straight month. Retail sales rose 1% last month, the Commerce Department reported Friday. Part of the gain reflected higher prices for gasoline. Still, excluding sales at gas stations, retail sales rose a solid 0.9%. February’s jump in sales followed a strong upward revision that showed a 0.7% increase in January. That was more than double the original estimate. “This is a very encouraging report,” said Paul Ashworth, chief U.S. economist at Capital Economics. He said spending should be a strong 3% or more in the first three months of this year. This category is closely watched because it accounts for 70% of total economic activity. The Retail HOLDRs ETF (AMEX: RTH) is trading flat today.
  • Reinsurance stocks across Europe dropped sharply Friday after a massive earthquake off the coast of Japan triggered a devastating tsunami. Analysts at Jefferies International said that, from a preliminary assessment, insured losses appear limited. The broker said it’s working on the assumption of a $10 billion industry loss, with an impact on the balance sheets of insurers and reinsurers of around 5%. “From an insurance perspective, it is fortunate that the epicenter was near Sendai rather than Tokyo,” the broker said, adding that household losses are likely to be limited because insurance take-up rates are low and many homes will not be covered. The SPDR Stoxx Europe 50 ETF (NYSEArca: FEU) is trading flat early Friday.
  • Oil prices have dropped below $100 per barrel for the first time in more than a week after a massive earthquake spawned a tsunami that slammed into northern Japan. Japan is the third-largest oil importer in the world. It’s unclear how much its economy will be affected by the disaster. But the news helped slow down what had been a three-week rally in oil markets. Gasoline prices in the U.S. continue to rise as the national average for regular unleaded climbed above $3.54 per gallon overnight. The United States Natural Gas Fund ETF (NYSEArca: UNG) is up 2.5% so far 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.