ETF Outlook for Wednesday, January 29, 2014 (ITA, TUR, EEM, KWEB, VNET)

ETF Outlook for Wednesday January 29, 2014

iShares MSCI Turkey Investable Market ETF TUR

After the closing bell yesterday the Turkish central bank raised its overnight lending rate to 12 percent from 7.75 percent and the overnight borrowing rate to 8 percent from 3.5 percent.

This move was to help combat the country’s cratering currency and should have a ripple affect around the globe. The emerging markets will likely be the biggest beneficiaries. The S&P 500 futures in the U.S. surged on the news as did TUR, which was up over 5 percent in thin after hours trading.

iShares Dow Jones Aerospace & Defense Index ETF ITA

After hitting an all-time high last week, ITA fell with the market sell-off before a small bounce of 0.6 percent yesterday. With the ETF’s second largest stocks, Boeing BA, set to report earnings before the bell today the ETF could be back on the move.

See also: Emerging Markets Mess - Blame It On The Fed?

The aerospace stock makes up over 9 percent of the ETF and is typically a major catalyst for the entire sector after earnings. ITA needs to hold the 50-day moving average at $104 to remain in a short-term uptrend.

iShares MSCI Emerging Markets ETF EEM

The news out of Turkey regarding the interest rate hikes will undoubtedly give the emerging markets a boost to begin the day, but the real story is whether they can follow through in the coming days.

The ETF is closing in on important support at the $36.50-$37.00 area and closed yesterday at $38.33 after hitting a low of $37.76 on Monday. The next week is critical to the intermediate-term future of EEM as well as the global markets.

KraneShares CSI China Internet ETF KWEB

The biggest mover yesterday (outside of the leveraged ETFs) was KWEB, a fairly new player in the Chinese technology ETF arena. The ETF finished Tuesday with a gain of 4.7 percent after falling 9.8 percent in the prior three trading sessions. The basket of Chinese Internet stocks rallied along with the entire country yesterday as money came back into the niche sector that has been a unique winner.

While China has struggled, the technology stocks have been big winners for investors. That is until the sell-off that began late last week. The biggest gainer for the ETF was 21Vianet Group VNET with a gain of 13.6 percent. The ETF broke a 6-session losing streak and is now closing in on the all-time high again. The stock has nearly tripled in the last ten months.