Energy, TIPs And Biotechnology ETFs To Watch This Week
The markets finished the final trading day of January on a somber note that underscored the heightened level of volatility that ushered in 2015.
The SPDR S&P 500 ETF (NYSE: SPY) fell nearly 3 percent last month amid a wide array of corporate earnings announcements and further proliferation of global quantitative easing efforts. Central banks are continuing their accommodative monetary practices to fuel the stock and bond markets this year.
The week ahead features several key economic releases including core U.S. inflationary statistics, motor vehicle sales and monthly employment data.
Here are the key ETFs to watch for the week of Monday, February 2:
Energy Select Sector SPDR (NYSE: XLE)
The energy sector is set to be a key player this week as both Exxon Mobil Corporation (NYSE: XOM) and Anadarko Petroleum Corporation (NYSE: APC) report earnings on Monday. These two large-cap stocks are top holdings in XLE, which tracks 45 energy-related companies.
Better-than-expected earnings announcements may help boost the downtrodden energy sector, which received a jolt on Friday when crude oil prices jumped more than 8 percent. This ETF will certainly help set the tone for trading in the early stages of February and will be one to keep a close eye on if oil prices build on this one day rally.
iShares TIPS Bond ETF (NYSE: TIP)
Treasury inflation protected securities finished 2014 with a very understated return compared to investment grade corporate and traditional Treasury bonds. However, TIP has jumped out of the gate with a gain of over 3 percent in 2015 and is currently trading near its 52-week highs.
This ETF tracks 37 specialized treasury securities whose face value rises with the consumer price index. Simply put, TIP is a play on pernicious inflationary pressures and may be viewed as a value-oriented area of the bond market compared to the high flying iShares 7-10 Year Treasury Bond ETF (NYSE: IEF).
SPDR S&P Biotech Index ETF (NYSE: XBI)
Biotechnology stocks have continued to show impressive momentum relative to the overall market and this week Gilead Sciences, Inc. (NASDAQ: GILD) is set to release its quarterly results. This could potentially impact XBI, which tracks 88 companies within the biotechnology field.
XBI has gained more than 7 percent this year, while the broad-based Health Care Select Sector SPDR (NYSE: XLV) has moved 1.3 percent higher. This market leading segment will be closely scrutinized in February as the market teeters at key support levels.
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