Market Overview

A Look Ahead: Next Week's ETFs to Watch


U.S. stocks started 2012 in decent fashion, but Friday's action can be viewed as a disappointment following the December jobs report that showed employers added 200,000 new jobs last month and the unemployment rate fell to 8.5%, the lowest since February 2009.

What should have been news that was welcome with open arms by investors was not and the S&P 500 and Dow Jones Industrial closed slightly lower today while the Nasdaq eked out a small gain.

Next week will be an interesting one to say the least. Not only does fourth-quarter earnings season kick into high gear, but the ability of the S&P 500 to close higher on Monday and remain positive for the first five trading days of the new year could prove pivotal to the fortunes of stocks this year.

Pick up a copy of this year's "Stock Trader's Almanac" to see just how important the first five trading days of a new year. It's compelling reading. And we have some compelling ETFs to watch in the week ahead that we offer up right here.

Financial Select Sector SPDR (NYSE: XLF) The Financial Select Sector SPDR could probably be included on this list for just about any week, but with J.P. Morgan Chase's (NYSE: JPM) earnings looming next Friday, XLF could see more activity than normal leading up to that report. After a dour 2011, XLF has gotten off to a decent in 2012. Going back to the last trading day of last year, the ETF is up nearly 3%.

iShares Dow Jones US Oil Equipment Index Fund (NYSE: IEZ) In a holiday-shortened week, Halliburton (NYSE: HAL) certainly found its way into the news more than it wanted to be, but despite the legal wranglings with BP (NYSE: BP), Halliburton turned in a decent performance for the week. That and oil prices looking like they want to stay above $100 per barrel, bode well for the IEZ's near-term fortunes.

iShares Silver Trust (NYSE: SLV) The iShares Silver Trust ended the week on a down note, but as the Daily Capitalist noted, March silver futures (and a few other contracts) are now in the world of backwardation and that could be good news for silver bulls going forward.

ProShares UltraShort FTSE China 25 (NYSE: FXP) Hopefully, the ProShares UltraShort FTSE China 25 won't make too many appearances here this year, but for now, investors appear skittish about what type of economic landing lies ahead for China and recent economic data out of the world's fastest-growing major economy has done little to alleviate those concerns.

Utilities Select Sector SPDR (NYSE: XLU) A few days may not make a trend, but it's worth noting that the Utilities Select Sector SPDR, one of 2011's best performers at the sector level, was taken to the woodshed this week. XLU and the rival Vanguard Utilities ETF (NYSE: VPU) suffered losses above 3%. Maybe this is good because it means the risk on trade is coming back into vogue. Or maybe it's bad because it could mean investors have nowhere to run and hide.

Posted-In: Earnings Long Ideas News Sector ETFs Broad U.S. Equity ETFs Short Ideas Specialty ETFs Emerging Market ETFs


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