A Look Ahead: This Week's ETFs to Watch
The S&P 500 touched a five-year high last week only to back a way from that lofty area as stocks meandered through most of last week without much conviction. At the end of the week, it was accurate to call broader market price action "fair" as the S&P 500 added 0.38 percent while the Dow Jones Industrial Average climbed 0.4 percent.
Look at the week ahead, this has the potential to be the first time in quite a while that traders and investors are able to focus corporate earnings, not the goings on in Washington, D.C. No, the debt ceiling debate has not been put to bed, but with over 70 marquee companies reporting earnings this week, the market has something else to ponder beyond politics.
With a week full of earnings reports, guidance and revisions, picking this week's candidates for ETFs to trade was easier than usual. Consider the following funds.
Financial Select Sector SPDR (NYSE: XLF) The no-brainer of this list. Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS) and J.P. Morgan Chase (NYSE: JPM) all report this week. That quarter combines for 17.4 percent of XLF's weight and that does not include reports from the likes of Bank of New York Mellon (NYSE: BK), U.S. Bancorp (NYSE: USB) on Tuesday and BB&T and PNC (NYSE: PNC) on Thursday.
Morgan Stanley (NYSE: MS), SunTrust (NYSE: STI) and State Street (NYSE: STT) all step into the earnings confessional Friday. All of that is to say this week will be a busy one for XLF and a possible test of the ETF's ability to turn old resistance at $17 into new support if need be.
Market Vectors Semiconductor ETF (NYSE: SMH) Semiconductor names were not exactly a leadership group in 2012, but the Market Vectors Semiconductor ETF has been on the receiving end of some positive catalysts in 2013. In the past month, SMH has gained 3.7 percent and its chart is showing increasing strength. The fund has an eventful Thursday ahead of it as U.S. traders will wake up Taiwan Semiconductor's (NYSE: TSM) results and Intel (NASDAQ: INTC) reports after the close that same day. Those two stocks combine for almost 34 percent of SMH's weight.
Market Vectors Oil Services ETF (NYSE: OIH) It has been noted that energy stocks and ETFs have recently shown signs of life. The Market Vectors Oil Services ETF is no exception as that fund has surged over five percent in the past month alone.
OIH also shares something in common with SMH. That is large allocations to a small number of stocks. In the case of OIH, Schlumberger accounts for 19.2 percent of the fund's weight. That is important because Schlumberger, the world's largest oil services firm, reports earnings on Friday morning. That report could set the tone for OIH and its constituents throughout earnings season.
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