PEJ Invesco Leisure and Entertainment ETF

Despite a weak GDP report and concerns over Spain, U.S. equity markets rose again in Friday trading. Investors seemed to focus in on the positive earnings and shook off the poor economic data as online retailer AMZN added more than 15% while tech giant Cisco also helped rally stocks to close the week.

Overall, the Dow added about 0.2% on the day while the S&P 500 gained a similar amount. Meanwhile, the Nasdaq continued its solid week on a great note, adding 0.6% in Friday’s session.

Currency markets again saw the dollar fall on the day, as the U.S. dollar index finished below the $78.8 mark to close the week. Meanwhile, bond markets were pretty much flat, as the 10 year finished where it started at a yield of 1.94% (read Is The Bear Market For Bond ETFs Finally Here?).

Commodity markets, however, followed their stock counterparts higher pretty much across the board in Friday trading. WTI crude added about 22 cents while natural gas surged 3.3% on the day. Softs also rose on the day across a variety of products while both the precious metals and industrial metals gained as well.

In ETF trading, investors saw a relatively light day of volume in a variety of products. Commodity volume remained light while a number of the bigger and more popular products failed to see much interest in the final Friday of the month. Yet, with that being said, investors did see some outsized activity in a couple products including a few small cap ETFs, sector funds, and some of the Asia-Pacific products.

In particular, ETF trading was heavy in the PowerShares Dynamic Leisure and Entertainment Fund (PEJ). This product usually sees volume of about 37,000 shares but saw a Friday spike to close to 128,000 shares to close out the week.

Undoubtedly, this move was due to the slew of earnings reports which hit the market after the bell on Thursday and before trading on Friday. Of particular concern to investors in PEJ was probably Starbucks (SBUX) the biggest component in the fund (read Three Cyclical ETFs That Are Surging Higher).

The company finished the day about 5.3% lower as investors sold off after the firm’s earnings report. Although the firm beat the Zacks Consensus Estimate, weak numbers in the European segment hammered sentiment in the security sending the stock down sharply and boosting trading volumes.

Beyond this, the travel sector saw a huge boost from the Expedia report although the security isn’t in the fund. Instead, exposure is robust to hotel operators and other travel websites and these may have been more active as a result of Expedia’s solid release.

Another ETF that saw a huge spike in interest was the Guggenheim China Small Cap ETF (HAO). This fund usually sees trading of about 116,000 shares in a session while today’s trading nearly reached the 745,000 mark (see What Bubble? China ETFs Soaring To Start 2012).

This spike in volume could have been due to the recent data releases that came from the country and the small caps’ role as more focused on local events. Investors saw relatively positive figures in the release of both the industrial profits YTD figure as well as the MNI April Business Condition Survey.

This business survey rose well above expectations and may have dispelled some worries over the health of the Chinese economy at least for the time being. Thanks to this, HAO saw increased volume although global economic worries helped to bring down the gains of the fund to just a 0.3% move for Friday’s session.

(see more on ETFs at the Zacks ETF Center)

 
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