Market Overview

ETF Outlook For Wednesday, April 23, 2014 (MGC, IYZ, TAN, BBH, GILD, T)

ETF Outlook For Wednesday, April 23, 2014 MGC, IYZ, TAN, BBH, GILD, T
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Vanguard Mega Cap 300 Index ETF (NYSE: MGC)

On Tuesday, the technicians at Bank of America made an argument that the leadership in the market is moving from the small cap stocks to the mega cap asset class.

The smaller companies led the most recent rally/uptend that began in 2012 and now they are starting to lag as the largest stocks by market cap in the market are holding up much better. MGC is one of the ETFs that concentrates on the largest stocks in the U.S.

The ETF is composed of 300 stocks that currently trade at a P/E ratio of 18.3 according to the Vanguard website. MGC is down 0.4 percent from its all-time high while the iShares S&P Small Cap 600 Index ETF (NYSE: IJR) is down 2.7 percent from its high.

iShares U.S. Telecommunications ETF (NYSE: IYZ)

The largest holding in the ETF, AT&T (NYSE: T), reported earnings after the bell Tuesday night and that beat estimates by a penny and revenue that was in-line with expectations. 

See also: Comparing Beyond BRIC ETFs

The stock was lower by over one percent after hours, but could change dramatically Wednesday before the opening bell and throughout the session. Expect IYZ to follow the lead of AT&T considering it makes up nine percent of the portfolio and that the top holdings tend to trade in tandem many days.

Guggenheim Solar ETF (NYSE: TAN)

One of the best performers yesterday were the solar stocks after hedge fund manager David Einhorn disclosed that he added to his position in SunEdison (NASDAQ: SUNE) that he started to accumulate in the fourth quarter of last year.

Helping boost the sector were Goldman Sachs upgrades to SunPower (NASDAQ: SPWR)and SolarCity (NASDAQ: SCTY), which the company called their best two solar ideas.

Finally, Canadian Solar (NASDAQ: CSIQ)announced a deal with a Japanese company that boosted that stock. All four stocks mentioned are top ten holdings in the ETF and can be attributed with the 5.3 percent gain in the ETF on Tuesday.

Market Vectors Biotech ETF (NYSE: BBH)

The ETF moved higher yesterday by 2.6 percent on the back of merger news out of the pharmaceutical sector. Today the catalyst could be a solid earnings from the ETF’s number one holding, Gilead Sciences (NASDAQ: GILD).

The stock closed yesterday up 1.8 percent and was up another four percent after hours based on a positive earnings report. With Gilead making up 12 percent of the portfolio it could be another nice day for BBH and its peers.

Posted-In: Bank of AmericaSector ETFs Broad U.S. Equity ETFs Specialty ETFs Previews Pre-Market Outlook Trading Ideas ETFs Best of Benzinga

 

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