Why Biotech, Copper And Euro ETFs Should Be Key This Week
The Federal Reserve helped buoy stock prices last week and the SPDR S&P 500 ETF (NYSE: SPY) is within close proximity of recapturing its all-time highs. In addition, the bond market received a shot of confidence from the dovish Fed language, which may signal a late-2015 rate hike rather than any near-term policy changes.
The week ahead features several important economic releases including the consumer price index, housing data, and fourth quarter GDP.
Here are the key ETFs to watch for the week of Monday, March 23:
iShares NASDAQ Biotechnology ETF (NASDAQ: IBB)
Biotech stocks hit an all-time high last week and IBB is now more than 20 percent higher this year. Despite that strong momentum, several experts are beginning to question where the continued catalysts for growth will come in this industry after multiple years of double digit gains.
IBB tracks a market cap-weighted index of 150 stocks and has over $8.8 billion in total assets.
One notable divergence in Friday’s price action was the late day weakness after a jump in morning trading. This may indicate that these high flying stocks are due for a breather; many would relish a pullback to establish more attractive positions.
iPath Bloomberg Copper Subindex Total Return ETN (NYSE: JJC)
After hitting a low in January, copper prices have been making steady headway and recently closed at a new two-month high. JJC is an exchange-traded note that tracks the daily price movement of unleveraged copper futures contracts.
This ETN jumped nearly 4 percent on Friday and the recent momentum may signal global industrial demand is improving.
Rising demand for copper is also widely considered to be a positive economic signal as well.
Guggenheim CurrencyShares Euro Trust (NYSE: FXE)
Volatility in the euro was one of the most talked-about themes of the week as the post-Fed price action led to significant swings in both directions. FXE tracks the daily price movement of the euro versus the U.S. dollar.
This ETF has been under pressure for nearly a year now as macroeconomic forces have propelled a flight to the U.S. dollar.
However, the recent price action in FXE may signal that the euro is due for a bounce higher amid a very crowded currency picture.
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