ETF Outlook For Wednesday, March 26, 2014 (IBB, IPO, FPX, SOCL, FB, KING)
ETF Outlook for Wednesday, March 26, 2014
iShares NASDAQ Biotechnology Index ETF (NYSE: IBB)
The biotech stocks were once again in focus with heavy volume for IBB and its peers Tuesday. When the closing well rang, the ETF closed out the session with a gain of 0.1 percent after trading both above and below the breakeven line.
The ETF was up 65 percent last year and rallied to a new high to begin 2014 before getting the rug pulled out from under them the last few days. The ETF is now down 12 percent from the all-time high set during the last week in February.
Renaissance IPO ETF (NYSE: IPO)
The highly anticipated IPO of mobile game maker King Digital Entertainment Plc (NYSE: KING) priced last night at $22.50 per share. This puts the value of the company just above $7 billion. The maker of the game Candy Crush Saga will begin trading Wednesday on the NYSE under the ticker symbol “KING." The IPO is the latest in a string of IPOs that are on a pace that is great than last year at this time based on both the number and the value of the deals.
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IPO and the First Trust IPOX 100 Index ETF (NYSE: FPX) both track indices that focus solely on recent IPO offerings. As the market has pulled back over the last two weeks, so have both ETFs. However, with a wave of new IPOs potentially entering the portfolios it could be setting up for a repeat of 2013 when the IPO outperformed the overall market.
Global X Social Media ETF (NYSE: SOCL)
A couple of stories related to the niche social media sector could have the stocks moving today. Last night Facebook (NASDAQ: FB), the ETF’s number two holding, announced it will be purchasing a virtual reality company for $2 billion. The stock is up in pre-market trading on the news. The other news related to the sector has to do with the IPO mentioned above – KING.
The gaming company is a close competitor to Zynga (NASDAQ: ZNGA), which is the fifth largest holding in SOCL. Depending on how KING trades throughout the session, it could be a benchmark for how ZNGA closes the day. With the news already scheduled plus the Chinese social media stocks in the midst of a pullback, today could be volatile for SOCL.
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