A Look Ahead: This Week's ETFs to Watch
Buoyed by a stronger-than-expected jobs report last Friday, U.S. stocks surged to new highs as the S&P 500 jumped above 1,600 for the first time ever.
The Dow Jones Industrial Average spent some trading above 15,000 while the Nasdaq was the best performer of three major U.S. indexes on the week, perhaps heartening investors that have been wondering when the technology sector will really start chipping in on this rally.
The week ahead is light on economic reports compared to last week and earnings season is winding down, so an argument can be made this week is light on catalysts. That also means the bears, what few of them are left, could find themselves short on ammunition as well. It seems like being long is the path of least resistance right now so keep an eye these ETFs, among others, this week.
First Trust Consumer Staples AlphaDEX Fund (NYSE: FXG)
It has been excellent three years for consumer staples stocks and the ETFs that hold them, but in 2013 FXG has been the leader among the ETF's tracking this sector. What some investors may not realize is that FXG has soared to the top of the staples ETF lot by not being heavy on the sector's usual suspects such as Procter & Gamble (NYSE: PG) and Coca-Cola (NYSE: KO).
FXG's chart is impressive and the ETF trades just pennies below its 52-week high. Importantly, this is one sector that does have some looming catalysts this week. Tyson (NYSE: TSN) and Sysco (NYSE: SYY) report earnings Monday followed by Green Mountain Coffee Roasters Wednesday. Those stocks combine for nearly 12 percent of FXG's weight.
iShares Dow Jones U.S. Oil & Gas Exploration & Production Index Fund (NYSE: IEO)
IEO was highlighted last Friday as the premier ETF avenue for playing the good news regarding the ouster of Occidental Petroleum Chairman (NYSE: OXY) Ray Irani. He of absurdly large compensation packages will leave the company and that could free up CEO Steve Chazen to perhaps sell assets or spin off downstream assets.
IEO has a 13.07 percent weight to Occidental, the largest of any energy sector ETF, so the fund is worth watching for follow-through purposes. Additionally, Anadarko Petroleum (NYSE: APC) reports earnings Monday and Apache follows on Thursday. Those stocks combine for 13.7 percent of IEO's weight and are both top-five holdings in the ETF.
iShares MSCI Malaysia Index Fund (NYSE: EWM)
Malaysians went to the polls over the weekend and Prime Minister Najib Razak's National Front coalition, which has ruled the country for nearly six decades, emerged with a parliamentary majority. Razak also won, but his opponents are not so sure and are calling for investigations into the results, according to NPR.
EWM has been a decent performer in recent weeks has a tendency to react poorly immediately following Malaysian election results. However, that trend also creates a buying opportunity as the ETF usually rebounds over the weeks immediately following the election-induced swoon. No promises that will happen this time around, but EWM should be atop traders' emerging markets ETFs lists this week.
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