Market Overview

A Look Ahead: This Week's ETFs to Watch

The good times continued for the bulls last week. When the closing bell sounded on Friday, the Dow Jones Industrial Average was found resting above 14,000 for the first time since 2007 and the S&P 500 capped its best January performance since 1997.

The S&P 500 is now up 6.1 percent year-to-date and all three major U.S. indexes are higher on the year.

With earnings season winding to a close (roughly half of the S&P 500 members have delivered quarterly results), traders may see the days ahead as an ideal time to book some profits while waiting for the next catalyst to move stocks and riskier assets higher.

Still, some near-term profit-taking does not mean the market's upward trajectory is in significant danger.

The week ahead is again heavy on data reports as the December factory orders report is due out today. Fourth-quarter productivity, the December consumer-credit reading and weekly jobless claims will be delivered on Thursday. And even though earnings season is drawing to a close, there are still plenty of reports to keep an eye. Indeed, the following ETFs should be in play this week.

SPDR S&P Retail ETF (NYSE: XRT) Following a stellar run in 2012, the SPDR S&P Retail ETF has continued to impress in 2013. The ETF has made a series of new all-time highs to start the year. Last week, the Conference Board said its January consumer confidence index plunged to 58.6 from 66.7 in December. The January reading is the lowest since November 2011.

However, Commerce Department said U.S. consumer spending rose 0.2% in December following a 0.4% increase in November. Overall, recent data points have been good and perhaps a case can be made the January drop in consumer confidence was a one-off event.

Sure, some XRT constituents report earnings this week, but given this ETF's almost 28 percent weight to apparel retailers and a nearly 16 percent allocation to specialty stories, the fund can be sensitive to conflicting consumer-related data points. Last week was an exception, but XRT's RSI resides above 80, indicating the fund could be ripe for some profit-taking if data is disappointing this week.

iShares S&P Global Energy Sector Index Fund (NYSE: IXC) Oil prices rose for the eighth consecutive week last week, giving futures the look of being in need of a near-term pullback. However, that retrenchment may not materialize this week and the iShares S&P Global Energy Sector Index Fund is not lacking for catalysts with which to make a run at its September 2012 highs.

Yes, most of the major U.S. oil companies have delivered earnings, but a pair of IXC holdings deliver results today, those being Anadako Petroleum (NYSE: APC) and Petrobras (NYSE: PBR). Do not expect much out of the latter, but Anadarko has the potential to deliver results that could send the stock soaring. More importantly, BP (NYSE: BP), five percent of IXC's weight, delivers results Tuesday before the bell. Statoil (NYSE: STO) reports later in the week. Those four stocks combine for about nine percent of IXC's weight.

iShares Dow Jones U.S. Healthcare Providers Index Fund (NYSE: IHF) Maybe it is because the iShares Dow Jones U.S. Healthcare Providers Index Fund has average daily volume of less than 29,000 shares that the ETF does not get much attention, but ignoring this fund has meant leaving 5.8 percent in year-to-date returns on the table.

In December, some analysts health insurance providers could post double-digit EPS growth this year.

How accurate that forecast will be remains to be seen, but investors may get a glimpse if the IHF holdings reporting this week provide guidance. Cigna (NYSE: CI), Humana (NYSE: HUM) and Coventry Health Care (NYSE: CVH) all report this week. That trio represents 13.5 percent of IHF's weight.

For more on ETFs, click here.

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

 

Most Popular

Related Articles (APC + BP)

Around the Web, We're Loving...

Partner Network

Get Benzinga's News Delivered Free