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Market Overview

ETF Outlook for October 18, 2013 (GDX, JNK, FDN, DXGE, GOOG)

ETF Outlook for October 18, 2013 GDX, JNK, FDN, DXGE, GOOG

Here are some notable ETFs worth taking a look at for Friday, October 18, 2013.

WisdomTree Germany Hedged Equity ETF (NYSE: DXGE)

The latest equity ETF to jump into the foreign currency-hedged arena began trading yesterday. The ETF with the most successful in the niche sector has been the WisdomTree Japan Hedged Equity ETF (NYSE: DXJ) with $10.9 billion in assets.

The question is whether investors are seeking an ETF with exposure to the German stock market while going short the euro. The db X-trackers MSCI Germany Hedged Equity ETF (NYSE: DBGR) has been around since May 2013 and has only accumulated $9.5 million in assets.

Market Vectors Gold Miners ETF (NYSE: GDX)

A 5.2 percent surge yesterday was the result of gold gaining $40/ounce after the debt deal was announced. Contrary to what many believed, the deal was actually positive for gold because all the politicians in DC did was kick the can down the alley until February.

More importantly it handcuffs the Fed until a long-term deal is agreed upon and we all know that will not take place before the first week of February. There is also speculation that GDX was the recipient of short covering considering the ETF was down 50 percent heading into yesterday.

SPDR High Yield Bond ETF (NYSE: JNK)

For the same reason gold increase, Treasuries also caught a bid yesterday as investors bet the Fed will not begin to taper anytime in the near future. The yield on the 10-year Treasury fell to 2.58 percent, the lowest close in two months.

The junk bonds are again moving higher with JNK gaining 0.5 percent yesterday and closing at the best level in nearly three months. If the Fed sits on its hand for a few months and stocks move higher, the winner in the bond market will be the high yield corporate bonds and JNK. The yield on JNK is an attractive 5.5 percent.

First Trust Dow Jones Internet Index ETF (NYSE: FDN)

One of the few losers yesterday should regain its mojo after its top holding blew earnings estimates out of the water last night. Google (NASDAQ: GOOG) saws its third quarter earnings increase by 36 percent, besting what the street was looking for and the stock immediately jumped $63/share to a new all-time high.

The stock makes up 10 percent of FDN and should be enough to boost its peers and the ETF. A close above $54.78 would be a breakout to a new high and the resistance level to watch for the ETF.


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