American stock markets closed the week on a sour note as a terrible nonfarm payroll report for June sent equities plunging across the board. Just 18,000 jobs were created last month, far below the expectations that called for well over 100,000 to materialize. This also boosted the unemployment rate up to 9.2%, sparking fears that May's figure was not an aberration and that the economy is slowing down.
As a result, all of the major indexes sank on the day, although many stocks fought back from their lows to finish the day down only modestly. All three of the major benchmarks finished Friday trading down less than 70 basis points each, led on the downside by the broad S&P 500.
In commodity markets, gold rose by about $13 an ounce thanks to the turmoil, while oil fell by more than $2.25 per barrel on fears of lower demand. Soft commodities were more mixed on the day, as a stronger dollar helped to weaken products such as cocoa and coffee while the grains, led by a 3.5% jump in corn, came storming back despite the broad market weakness. Perhaps unsurprisingly to many investors, T-Bills did see some inflows as a safe haven, as the 10 Year yield fell close to the 3% mark while the Two Year saw its yields decline to just 0.40%.
One of the biggest winners in the ETFdb 60 on Friday was the United States Natural Gas Fund (NYSE: UNG ) , which rose by 1.1% in Friday trading. Today's gains came as traders went bargain buying after yesterday's sell-off in the fuel, as many wanted to be long in the important commodity ahead of the weekend amid new reports of warmer weather across much of the country.
Prices were also boosted by a report from Baker Hughes, which said that the number of rigs drilling for natural gas declined by one, reversing two straight weeks of gains. Currently, there are 873 rigs drilling for the fuel, a decline of more than 110 from the year-ago period, suggesting that supplies of the fuel are dwindling. Unfortunately, many analysts believe that the rig count will need to get closer to 800 to reach equilibrium, so we could see further losses in this popular fund in the meantime.
One of the biggest losers in the ETF world on Friday was the Vanguard MSCI Europe ETF (NYSE: VGK ) , which sank by 1.6% to close out the week. Friday's losses came thanks to continued worries over the sovereign-debt crisis plaguing the eurozone region, this time with a focus on the giant economies of Spain and Italy. Yields on Two Year Italian debt have gained more than 50 basis points since the beginning of the week while Spain has seen a similar, but smaller, jump in its two-year notes as they have seen a roughly 40-point gain in the period. Thanks to these moves, and more fears over the political ability of these two nations to get their budgets under control, the Italian and Spanish ETFs were both down more than 3.4% on the day, further adding to the continent's woes as well as those of VGK.
However, the selling wasn't exclusive to these two nations, as all the funds in our Developed Europe category saw losses on the day, helping to push VGK down to a loss for the week.
Disclosure: No positions at time of writing.
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