ETF Outlook for November 5, 2013 (DKXW, GEX, TSLA, EEM, TBT)
Here is your ETF Outlook for Wednesday November 6, 2013.
WisdomTree Korea Hedged Equity ETF (NYSE: DKXW)
The latest international hedged equity ETF begins trading today. This will be the first ETF that invests in South Korean stocks and at the same time will hedge against fluctuations in the Korean Won.
The iShares MSCI South Korea ETF (NYSE: EWY) has been the most popular vehicle for U.S. investors to invest in the Asian country the past few years. The ETF has garnered $4.4 billion in assets. Year-to-date EWY is unchanged and lagged most markets around the globe.
Market Vectors Global Alternative Energy ETF (NYSE: GEX)
The ETFs largest holding, making up 11.2 percent, reported earnings last night and the Street has not been to kind to the shares. Tesla Motors (NASDAQ: TSLA) did not comment on 2014 and it scared investors and sent the share down 10 percent after hours.
Expect GEX to take a direct hit if TSLA remains substantially lower throughout the day. Another ETF with large exposure to TSLA is the First Trust NASDAQ Clean Edge Green Energy ETF (NYSE: QCLN). The stock makes up 7 percent of the portfolio and is the fifth largest holding.
iShares MSCI Emerging Market ETF (NYSE: EEM)
The emerging markets fell big yesterday sending EEM to its lowest level in nearly one month. The ETF was dragged lower by big losses in Turkey, Mexico, and Brazil.
A combination of news out of China and the fear that tapering could be around the corner is not good for the emerging markets. It will be important for EEM to hold above the $40.75 area if the selling continues. A close below that support level could be the beginning of the end for the potential year-end rally for the asset class.
ProShares UltraShort 20+ Year Treasury ETF (NYSE: TBT)
The yields on U.S. Treasury bonds continued their uphill climb yesterday as bond prices plummeted. The fear that the Fed will taper sooner rather than later has crept back into the market and bonds are reacting ahead of the jobs number on Friday morning. TBT, which is double the inverse of the long bond, closed the day up 2.3 percent at the best level in three weeks.
The next two days will be positioning by traders before the jobs number and the consensus is leaning towards a decent report that will force the Fed to begin taper, thus sending bond prices lower and yields higher. Be careful as this trade may go wrong quickly.
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