Market Overview

A Look Ahead: Next Week's ETFs to Watch (IYW, XLE, UGA)

A spate of cautionary economic data combined with a plethora of earnings reports that did nothing to excite investors led to a lethargic week of action for U.S. equities. Of course, Europe played a heavy hand in the glum results for stocks as well.

The iShares MSCI France Index Fund (NYSE: EWQ) was punished as traders speculated the Euro Zone's second-largest economy is headed for a credit rating downgrade. Despite a 2.1% gain on Friday, the iShares MSCI Spain Index Fund (NYSE: EWP) is still down more than 7% in the past week and the poor iShares MSCI Italy Index Fund (NYSE: EWI) really isn't all that far removed from its 52-week low.

All of the aforementioned would be valid trades, but we have others in mind, including some funds with significant exposure to momentum stocks that report earnings next week.

Energy Select Sector SPDR (NYSE: XLE) Next week is absolutely crucial on the earnings front when it comes to XLE. On Monday, ConocoPhillips (NYSE: COP) reports first-quarter results. Then Exxon Mobil (NYSE: XOM) and Occidental Petroleum (NYSE: OXY) step into the earnings confessional on Thursday. Chevron (NYSE: CVX) wraps the earnings updates from the major U.S. integrateds on Friday. Those four stocks combine for about 43% of XLE's weight. That's kind of a big deal.

PowerShares NASDAQ Internet Portfolio (Nasdaq: PNQI) PNQI is an excellent idea for getting basket exposure to momentum stocks but that idea only works in overtly favorable market conditions, not the mediocrity investors have had to contend with recently. PNQI will be put to the test next week due to earnings reports from Baidu (Nasdaq: BIDU) on Tuesday and Amazon (Nasdaq: AMZN) on Thursday. Those two combine for 16.4% of PNQI's weight.

Industrial Select Sector SPDR (NYSE: XLI) The Industrial Select Sector SPDR has been holding up fairly well lately and it looks support is firm at $36 in the event of a deeper broader market pullback. However, XLI isn't just a technical play, it's an earnings play next week. Between Tuesday and Wednesday, four of XLI-s top-10 constituents report. Dow components United Technologies (NYSE: UTX), Caterpillar (NYSE: CAT), 3M (NYSE: MMM) and Boeing (NYSE: BA) represent over 19.5% of XLI's weight.

United States Gasoline Fund (NYSE: UGA) Uggh, UGA has been ugly since the start of April, falling about 7%, but that's music to the ears of U.S. drivers that have been getting squeezed at the pump. UGA is one long ETF that when it falls actually signals good things for the broader market. It's technically vulnerable now, having given up its 20- and 50-day moving averages.

iShares Dow Jones US Technology Index Fund (NYSE: IYW) Or the PowerShares QQQ (Nasdaq: QQQ), Technology Select Sector SPDR (NYSE: XLK) and the Focus Morningstar Technology ETF (NYSE: FTQ) and that's just to a name a few ETFs with large weights to a little stock named Apple (Nasdaq: AAPL). The iPad maker reports earnings after the close Tuesday. Yeah, that will be kind of important.

Follow me on Twitter: @ETFProfessor1

Posted-In: Earnings Long Ideas News Sector ETFs Broad U.S. Equity ETFs Short Ideas Specialty ETFs Futures Best of Benzinga

 

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