ETFs pegged to the major U.S. equity indices ended the the holiday-shortened week in the red with most of the damage occurring Friday after a dismal June nonfarm payrolls report.
For the week, the S&P 500 was down 0.9% in afternoon trading Friday, while the Dow shed 1.2% and the Nasdaq Composite lost 0.4%.
The jobs market appears to be losing steam. The U.S. economy created 80,000 jobs last month, below expectations. The May nonfarm payrolls figure was revised to 77,000 as job growth has tailed off in recent months. The unemployment rate held steady at 8.2% in June, the Labor Department said Friday.
“The job market is soft,” said David Resler, chief economic adviser at Nomura Securities International, in a Bloomberg News report. “I’d characterize our reaction as much the same way the Fed will react — not surprised but disappointed. It’s just not the kind of growth we need to see at this stage in the business cycle.”
The best-performing ETFs this week focused on the commodities sector.
Funds indexed to grains and corn prices rallied on the U.S. heat wave and droughts in the Midwest. Elsewhere in commodities, energy ETFs were volatile this week along with oil prices. Gold, silver and precious metal ETFs were lower as the U.S. dollar strengthened. Also in currencies, euro ETFs were weak after the European Central Bank cut interest rates.
There were pockets of strength in some equity sector ETFs. For example, homebuilder and biotech ETFs are enjoying multiyear breakouts.
In the coming week’s economic data, look for reports on import and export prices, consumer credit and sentiment, the trade deficit, federal budget, producer prices and the minutes from the latest Fed meeting.