Bearish pressures prevailed on Wednesday as major equity indexes on Wall Street fell victim to profit taking after a less-than-stellar durable goods data release. The Dow Jones Industrial Average led the way lower for a second trading session in a row, shedding 0.54% on the day, while the Nasdaq and S&P 500 tied, each losing 0.49% on the day. Surprisingly, gold headed south alongside equity markets. Futures prices for the precious metal lost upward of 1% on the day, settling near $1,660 an ounce.
On the home front, selling pressures built up after durable goods data missed the mark. Durable goods orders grew by 2.2% last month, which missed analysts estimates of 2.9%, although it was still an improvement from the previous reading of negative 3.6%. News from overseas were also less than encouraging; U.K. GDP came in at 0.5% versus the expected 0.7%, while German CPI came in at 2.1% versus the expected 2.2%. Although economic data releases were far from worrisome, investors nonetheless expressed their concerns and took profits from various corners of the market.
Gains were sparse on Wednesday and the iShares S&P California Muni Bond Fund (NYSEARCA:CMF) was one of the strongest performers, gaining 0.25% on the day. There were no relevant fundamental news to justify the price action in CMF. Perhaps investors simply jumped ship from equities and into bonds as euphoria levels on Wall Street faded. CMF has gained close to 2% from a year-to-date performance perspective.
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On the flip side, losses were abundant and the iShares MSCI Brazil Index Fund (NYSEARCA:EWZ) was one of the weakest performers, shedding 2.17% on the day. Emerging markets equity funds took a hit across the board, and EWZ was no exception, as investors scaled back their risk exposure following a disappointing durable goods data release on the home front. Despite today’s sell-off, this ETF is still up an impressive 13% year-to-date.
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Disclosure: No positions at time of writing.
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