Market Overview

A Look Ahead: Next Week's ETFs To Watch

A dismal June jobs number put a dent, albeit small, in the recent rally delivered by stocks and that is the big headline grabber to end this holiday-shortened week, but there is more...much more.

Heading into the weekend, there are fresh and ominous concerns regarding Europe's sovereign debt woes. Namely that contagion is in fact on the horizon as yields on Italian and Spanish two-year government bonds surged on Friday on concerns the two biggest PIIGS economies could be next to seek bailouts.

That's not good news heading into the weekend, but does make for some obvious choices for next week's ETFs to watch.

1) iShares MSCI Italy Index Fund (NYSE: EWI) and the iShares MSCI Spain Index Fund (NYSE: EWP): Heading into Friday's close, EWI was down almost 4.4% and EWP was off 3.6%. In the case of EWI, the sell-off was occurring on volume that was more than double the daily average. As noted, both ETFs could be extremely vulnerable next week. Short 'em next week or go long the ProShares UltraShort MSCI Europe (NYSE: EPV).

2) Global X Aluminum ETF (NYSE: ALUM): Alcoa (NYSE: AA), the largest U.S. aluminum producer, kicks off another earnings season on Monday and this report is always heavily watched for at least a day or two. Alcoa may not be the most important Dow stock (it isn't), but an encouraging outlook from the aluminum giant could move ALUM.

3) Financial Select Sector SPDR (NYSE: XLF): Prior to Friday, bank stocks were showing some signs of at least acting less poorly than they have been and XLF had been performing well as of late. JPMorgan Chase (NYSE: JPM) steps into the earnings confessional on Thursday followed by Citigroup (NYSE: C) on Friday, so XLF is definitely one to watch in the week ahead. The ETF is facing strong resistance just above $15.50.

4) Market Vectors Rare Earths/Strategic Metals ETF (NYSE: REMX): With the debate over rare earths supply and prices raging on and investors still deciding to what degree they want to embrace high-beta fare, REMX has been fighting to break resistance at $26. Avalon Rare Metals (AMEX: AVL), a top-20 holding in the ETF, reports earnings next Friday.

5) Market Vectors Indonesia ETF (NYSE: IDX): Friday was a sea of red for many emerging markets ETFs, but IDX was a standout, notching small gain on big volume that took the ETF to a new 52-week high. As we've said before, Indonesia will be a leader, not a follower, as investors once again pour cash into emerging markets ETFs.

Posted-In: Earnings Long Ideas News Sector ETFs Short Ideas Specialty ETFs Emerging Market ETFs Technicals

 

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