ETF Outlook for Thursday July 3, 2014

ETF Outlook for Thursday July 3, 2014

 

Today investors will be focused on three things, jobs, jobs, and more jobs. Oh, and maybe how quickly they can get out of work and on the road to beat the holiday traffic. There will likely be some big moves after the opening bell rings as volume will be low, allowing for above average volatility.

 

The consensus estimate for jobs created is right around 215,000 for the month of June. After yesterdays much better than expected ADP jobs number of 281,000 the market may be looking for a number higher than what the consensus is predicting. Either way, as long as the number is not too far above or too far below the 215,000 level it should not have too much of a longer-term affect on stocks or bonds. The Fed is not ready to change its tune anytime soon as evidenced by Janet Yellen’s speech this week. And with the Fed on your side, stocks should continue their march towards all-time highs.

 

Below are a few ETFs that may be on the move.

 

SPDR S&P 500 ETF SPY

 

A new all-time high for the broad based equity ETF yesterday after a minimal 0.1 percent gain. Investors should expect some big moves early on for SPY, but odds are the ETF will end the session within one percent of its closing price yesterday. Remember that the stock market closes early today at 1pm ET.

 

iShares Barclays 20+ Year Treasury Bond ETF TLT

 

After the robust ADP jobs number yesterday bonds got hammered and TLT finished the day lower by 1.1 percent. The ETF was not far from closing at the lowest level in two months as investors believe the better than expected jobs numbers will lead to the Fed raising interest rates sooner rather than later. As interest rates increase the value of bonds fall, thus TLT will not be a good investment in a rising rate environment.

 

SPDR Gold ETF GLD

 

After a big rally the last month the price of gold consolidated the last two days just below a significant resistance level. For GLD $128.25 is a level that it will have trouble breaking through. Yesterday the intraday high was $128.24 and it closed at $127.70. The jobs number will move the price of the precious metal and pre-market the ETF is already trading lower.

Posted In: BondsBroad U.S. Equity ETFsCommoditiesMarketsETFs
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