Stay Informed and Stay Ahead: Resources, February 12th, 2024.
On Federal Reserve speaker days, certain Exchange-Traded Funds (ETFs) may respond more actively to market fluctuations. Here are some potentially effective ETFs to consider:
- Financial Sector ETFs: Funds like the Financial Select Sector SPDR Fund (XLF) tend to be sensitive to interest rate changes and monetary policy announcements. They could see increased activity on Fed speaker days.
- Volatility ETFs: ETFs such as the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX) or the ProShares VIX Short-Term Futures ETF (VIXY) may experience heightened trading volume as investors hedge against market uncertainty during Fed speeches.
- Treasury Bond ETFs: Funds like the iShares 20+ Year Treasury Bond ETF (TLT) or the Vanguard Short-Term Treasury ETF (VGSH) can be influenced by changes in interest rates, making them potentially responsive to Fed communications.
- Gold ETFs: ETFs like the SPDR Gold Shares ETF (GLD) often serve as a safe-haven asset during periods of economic uncertainty. They may see increased demand on Fed speaker days if investors seek refuge from market volatility.
- Currency ETFs: ETFs tracking major currencies such as the Invesco CurrencyShares Euro Currency Trust (FXE) or the Invesco CurrencyShares Japanese Yen Trust (FXY) may react to shifts in monetary policy discussed in Fed speeches.
- Broad Market ETFs: Funds like the SPDR S&P 500 ETF Trust (SPY) or the Vanguard Total Stock Market ETF (VTI) could experience heightened volatility and trading activity as investors reassess their positions based on Fed communications.
The effectiveness of these ETFs can vary based on the content and tone of the Fed speakers’ remarks, as well as broader market conditions.
