ETF Outlook for the Week of December 9, 2013 (IYT, INDY, BJK, EWW)
ETF Outlook for the week of December 9, 2013
iShares S&P India Nifty 50 ETF (NYSE: INDY)
The Indian stock market is up 20 percent since September and the continued delay of the Fed taper could help push the gains even higher. According to Barron’s this weekend, the country trades at an attractive valuation with a forward P/E ratio of only 13.0. Add in the expected earnings growth of 8-10 percent going forward and the country looks like a buying opportunity.
INDY is a basket of 50 stocks with a heavy concentration on the banks, technology, and cigarettes. Despite the rally since September, the ETF remains lower by 3 percent for the year. This week the Barron’s article could bring more attention to the ETF and it could continue the recent breakout.
iShares Dow Jones Transportation Average Index ETF (NYSE: IYT)
Cold and inclement weather wreaked havoc around the country this weekend. The snow could be seen in several NFL stadiums on Sunday as teams battled the freezing temperatures and wind. The NFL was not the only people dealing with weather, travelers and transportation companies also had to make major changes to their everyday business the last few days.
The sector with the largest exposure in IYT is the railroads, which should not have been too affected by the weather. However, the delivery services and airlines make up 37 percent of the ETF and both were directly affected by the weather the last few days and more is expected early in the week on the east coast.
Market Vectors Gaming ETF (NYSE: BJK)
The gaming stocks have quietly put together a good rally recently and a solid 2013 based on some bullish trends in the industry. Talks of casinos coming to Japan along with a solid start to the online gambling in New Jersey are just two catalysts that could help push the related stocks higher. For the year BJK is up a whopping 46 percent and is trading near its highest level ever.
With only 29 percent of the ETF in the U.S., BJK is a truly global investment opportunity. Asia makes up a good portion of the portfolio and is with its growth in the gaming mecca of Macau, the region should continue to perform well.
iShares MSCI Mexico Index ETF (NYSE: EWW)
The country is getting set to open up its energy sector and end the monopoly of state-run Pemex for the first time in decades. The bill would open up the country’s energy resources to private companies and allow them to explore and extract the commodities. The estimates are that the move could add a whole percentage point onto the GDP for the country.
The ETF has been struggling this year with a loss of 3 percent. However, the ETF has been starting to perk up over the last few weeks. If the deal goes through it would be good for the entire Mexican economy, especially the consumer goods and financials, two sectors that account for a large portion of EWW.
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