A Look Ahead: This Week's ETFs to Watch
In a week light on economic data points, but also one where the Federal Reserve again figured prominently into the equation, the S&P 500 mustered enough strength to close at a record high.
So did the Dow Jones Industrial Average and the Nasdaq Composite jumped to a new 52-week high. Oh and by the way, earnings season got going.
With that in mind, ETFs traders and investors should note that prior to the start of this earnings season, downbeat revisions reached a multi-year. At the sector level, some analysts do not expect much in the way of positive surprises, just opportunities to look for those groups that are less bad than others. With 70 S&P 500 components reporting this week, investors will have plenty of chances to do just that.
Economic data due out this week includes retail sales Monday and June consumer prices and housing starts later in the week. Indeed, this should be an eventful week the following ETFs and plenty of others, as well.
Financial Select Sector SPDR (NYSE: XLF)
Or any bank ETF for that matter. Bank earnings season got rolling in earnest last Friday when J.P. Morgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) delivered results. Those two stocks combine for nearly 17 percent of XLF's weight, but a slew of other XLF constituents, including more of the ETF's top-10 holdings are scheduled to report this week.
That list includes Goldman Sachs (NYSE: GS), Citigroup (NYSE: C) and Bank of America (NYSE: BAC). Financial services ETFs, including XLF, have been among the top-performing sector funds this year so a batch of negative earnings and guidance could threaten near-term risk appetite.
Add the SPDR S&P Regional Bank ETF (NYSE: KRE) and the First Trust NASDAQ ABA Community Bank Index Fund (NASDAQ: QABA) to the list of financial services ETFs that should be monitored in the week ahead.
Vanguard Information Technology ETF (NYSE: VGT)
Just as it is a pivotal week for bank earnings, the same can be said of the technology sector, the largest sector weight in the S&P 500. Here is the skinny: This week investors will be treated to results from Google (NASDAQ: GOOG), Intel (NASDAQ: INTC), Microsoft (NASDAQ: MSFT) and International Business Machines (NYSE: IBM). Those stocks combine for nearly a quarter of VGT's weight at the end of the first quarter.
With the Nasdaq running to a new 52-week, VGT and its rivals have been decent performers in recent weeks as the Vanguard offering is up nearly 3.1 percent in the past month. Investors looking to participate in tech dividend growth should opt for the First Trust NASDAQ Technology Dividend Index Fund (NASDAQ: TDIV).
iShares U.S. Healthcare Providers ETF (NYSE: IHF)
Starting with Thursday's report from Dow component United Health (NYSE: UNH), all of the iShares U.S. Healthcare Providers ETF's top-10 holdings report results over the next two weeks. In what has been an excellent year for health care ETFs, IHF a direct Obamacare play has stood tall with a gain of nearly 25 percent.
In the past 90 days, IHF is up about 13.1 percent, more than double the gain of the Health Care Select Sector SPDR (NYSE: XLV). XLV itself is worth trading this week with top holding Johnson & Johnson (NYSE: JNJ) reporting before the bell Tuesday.
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