Market Overview

ETF Outlook For Thursday, May 15, 2014 (RTH, EWI, WMT, IGN, CSCO, EWJ)

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Market Vectors Retail ETF (NYSE: RTH)

The country’s largest retailer and employer, Wal-Mart (NYSE: WMT), reported disappointing earnings Thursday morning that showed flat sales from last year. Both earnings and revenue came in below expectations and the stock is down over two percent pre-market.

The stock makes up 11.2 percent of RTH and will be pressuring the ETF as well as the overall retail and consumer sectors. Kohl’s (NYSE: KSS) is not a top ten holding for RTH, but it is a big name in retail that is also down on disappointing same-store sales.

iShares MSCI Italy Index ETF (NYSE: EWI)

Italy’s GDP fell back into contraction territory after reporting a drop of 0.1 percent for the first quarter. This was below expectations and a fall from the 0.1 percent gain in the previous quarter. Stocks in the country fell on the news and EWI is down over two percent in trading before the opening bell.

After hitting a three-year high last month the ETF is now down seven percent and has breached its 50-day moving average. The one silver lining is that the growth in the Eurozone may have pushed the ECB over the edge to ease and implement more stimulus, which could boost stocks.

Related: Two New WisdomTree International ETFs (IHDG, EUDG, BHP, NVS)

iShares North American Tech-Multimedia Networking ETF (NYSE: IGN)

One of the few ETFs set to open higher is IGN due to its 9.6 percent stake in Cisco Systems (NASDAQ: CSCO). The large tech company reported earnings last night that beat the street and have everyone excited once again about big tech names.

The stock is up six percent pre-market and with IGN calling CSCO its top holding, it should be enough to help the ETF greatly outperform its tech peers today.

iShares MSCI Japan Index ETF (NYSE: EWJ)

While growth in the Eurozone was disappointing, Japan recorded its best GDP number in over two years during the first quarter. The annualized number of 5.9 percent was much higher than the 0.3 percent number from the fourth quarter and well above the estimate of 4.2 percent.

The Japanese stocks were not up on the news because many believe the quarter is an anomaly due to a new sales tax being implemented. Therefore, Japanese consumers were spending lots of money before the sales tax is implemented and it will cannibalize growth in future quarters.

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