Short interest for Invesco Building & Construction ETF gives investors a sense of the degree to which investors are betting on the decline of Invesco Building & Construction ETF's stock. Short interest data is updated every two weeks.

Invesco Building & Construction ETF (ARCA:PKB), Short Interest Report

Invesco Dynamic Building & Construction ETF

PowerShares Dynamic Build & Construction

Fort,Myers,,Usa,-,January,28,,2022:,Sign,For,Pulte

Earnings

Equities

Large Cap

News

iShares Dow Jones US Homenstruction Index Fund

PowerShares ETF Trust Dynamic Building &nstruction Portfolio

PulteGroup (PHM) reported Q1 FY24 results, with revenue at $3.95B, beating expectations. Home sale revenue rose 10% and gross margin increased by 50bps. Net new orders increased 14% and EPS rose 32%.

Why Homebuilder PulteGroup Shares Are Higher Today

homebuilder shutter2

Guidance

Movers

D.R. Horton, Inc. reported Q2 FY24 earnings above estimates with sales and orders increasing. Company updates revenue outlook and declares dividend.

Why Builder D.R. Horton Shares Are Surging Today

Sector ETFs

Health Care

Markets

Trading Ideas

ETFs

General

PowerShares ETF Leisure & Entertainment Port

The U.S. economy added 303,000 jobs last month. That data breezed past expectations for 205,000 job gains, according to FactSet consensus estimates, as quoted on CNBC. The unemployment rate in the United States dipped to 3.8% in March 2024 from the previous month&#39;s two-year high of 3.9% and surprising market expectations, which had forecasted the rate to remain unchanged.

3 Sector ETFs &amp; Stocks to Bet on March Jobs Data

Invesco Building & Construction ETF

PT Bakrie & Brothers Tbk

PeakBirch Commerce Inc Ordinary Shares

PEAKBIRCH COMM INC by PEAKBIRCH COMM INC.

PeakBirch Commerce Inc

Parke Bancorp Inc

Packable

Peak Bio Inc

PulteGroup, Inc.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PHM#NYSE">PHM</a>) shares are trading higher after the company reported&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/b38374279/pultegroup-inc-reports-first-quarter-2024-financial-results" rel="noreferrer noopener">first-quarter FY24&nbsp;results</a>.
Revenue stood at $3.95 billion, beating the consensus of $3.58 billion.
Reported home sale revenues rose 10% Y/Y to $3.8 billion, with higher revenues reflecting an 11% increase in closings to 7,095 homes, partly offset by a 1% Y/Y drop in average sales price to $538,000.
The gross margin for home sales stood at&nbsp;29.6%, increasing by 50 basis points Y/Y, benefiting from ongoing strength in homebuyer demand and a favorable geographic mix of homes.
Net new orders increased 14% Y/Y to 8,379 homes. The cancellation rate dropped to 10% of the backlog at the start of the period, a decrease from 13% in the first quarter of the previous year.
GAAP EPS rose 32% Y/Y to $3.10. Adjusted EPS of $2.87 beat the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">consensus of $2.36</a>.
PulteGroup&#8217;s&nbsp;quarter-end backlog was 13,430 homes, valued at $8.2 billion. The company ended the year with $1.8 billion of cash and a debt-to-capital ratio of&nbsp;15.4%.&nbsp;
During the quarter, the company repurchased 2.3 million of its common shares for $246 million, or an average price of $106.73 per share.
&#8220;Given PulteGroup&#8217;s broad operating platform and deep product portfolio, along with the powerful incentive programs we can offer to help improve the overall affordability equation, we are well positioned to expand our market share while helping to provide much needed new housing stock.&#8221; said Ryan Marshall, PulteGroup President and CEO.
Investors can gain exposure to the stock via IShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and Invesco Building &amp; Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>). 
Price Action: PHM shares were up 3.9% at $112.14 at last check Tuesday.
Photo: Shutterstock

D.R. Horton, Inc.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>) shares are trading higher after the company reported better-than-expected second-quarter FY24 financial results and&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/b38309418/d-r-horton-inc-americas-builder-reports-fiscal-2024-second-quarter-earnings-and-declares-quarterly" rel="noreferrer noopener">issued guidance above estimates</a>.
Sales grew 14% Y/Y to $9.1 billion, beating the consensus of $8.3 billion. Net sales orders increased 14% Y/Y to 26,456 homes and 17% in value to $10.1 billion.
Homes closed in the quarter increased 15% Y/Y to 22,548 homes and 14% Y/Y in value to $8.5 billion.&nbsp;
EPS was $3.52 (+29% Y/Y),&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">beating the consensus of $3.06.</a>
Sales order backlog of homes under contract as of March 31, 2024, decreased 7% to 17,873 homes and 5% in value to $7.0 billion.
D.R. Horton had 45,000 homes in inventory, of which 27,600 were unsold as of March 31, 2024.
Return on equity (ROE) was 22.2% for trailing twelve months ended March 31, 2024, and homebuilding return on inventory (ROI) was 29.9%.
The company's net cash used in operations for the six-months totaled $(470.1) million, compared to the operating cash flow of $1.47 billion a year ago.
Consolidated cash balance was $3.1 billion, and available capacity on its credit facilities was $2.6 billion, for a total liquidity of $5.7 billion.
D.R. Horton repurchased 2.7 million shares of common stock for $402.2 million during the quarter. The company's remaining stock repurchase authorization on March 31, 2024, was $800.5 million.
Dividend: D.R. Horton declared a quarterly cash dividend of $0.30 per common share, payable on May 9, 2024, to stockholders of record on May 2, 2024.
Outlook: D.R. Horton updates FY24 outlook for revenue to $36.7 billion to $37.7 billion (prior view $36 billion-$37.3 billion) vs. the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">consensus of $36.32 billion</a>.
It now expects Homes closed to be 89,000 homes to 91,000 homes (prior view 87,000 homes-90,000 homes).
DHI reiterated cash provided by operations guidance of around $3 billion and currently expects share repurchases of ~$1.6 billion.
&nbsp;Investors can gain exposure to the stock via&nbsp;IShares U.S. Home Construction ETF&nbsp;(BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and&nbsp;Invesco Building &amp; Construction ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>).
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/03/37855254/are-you-a-housing-market-lock-in-high-mortgage-rates-result-in-people-not-living-in-homes-they-w" rel="noreferrer noopener">Are You A Housing Market Lock-In? High Mortgage Rates Result In &#8216;People Not Living In Homes They Would Prefer&#8217;</a>
Price Action: DHI shares are up 2.65% at $149.60 on the last check Thursday.
Photo via Shutterstock

The U.S. economy added 303,000 jobs last month. That data breezed past expectations for 205,000 job gains, according to FactSet consensus estimates, as quoted on CNBC. The unemployment rate in the United States dipped to 3.8% in March 2024 from the previous month&#39;s two-year high of 3.9% and surprising market expectations, which had forecasted the rate to remain unchanged.
Additionally, the labor force participation rate increased to 62.7% from a near one-year low of 62.5% in the preceding periods, and the employment-population ratio climbed to 60.3% from 60.1%. Below, we have highlighted some of the sectors that will likely see smooth trading in the days ahead in light of the strong March jobs data.
<h3>Sectors in Focus</h3>
Healthcare
Employment in the healthcare industry increased by 72,000 in jobs, above the average monthly gain of 60,000 over the prior 12 months. In March, job growth continued in ambulatory health care services (+28,000), hospitals (+27,000), and nursing and residential care facilities (+18,000).
Health Care Select Sector SPDR ETF (ARCA:XLV) can be played to tap the moderate momentum. HCA Healthcare (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hca#NYSE">HCA</a>), which has a Zacks Rank #2 (Buy) deserves a mention. It is the largest non-governmental operator of acute care hospitals in the United States.
Construction
In March, employment in construction (+39,000) was in line with the average monthly gain over the prior 12 months (+19,000). Over the month, employment increased in nonresidential specialty trade contractors (+16,000).
Investors can keep a watch on the price movement of Invesco Dynamic Building &amp; Construction ETF (ARCA:PKB). As far as the stock is concerned, Zacks Rank #2 (Buy) Dycom Industries (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dy#NYSE">DY</a>) can be played. It is a leading provider of specialty contracting services throughout the United States.
Leisure
Employment in leisure and hospitality rose by 49,000. The industry has returned to its pre-pandemic February 2020 level. Over the past one year, job growth in the industry had averaged 37,000 per month.
The data makes Invesco Dynamic Leisure and Entertainment ETF (ARCA:PEJ) a timely investment. The Zacks Rank #2 Brinker International (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/eat#NYSE">EAT</a>), owns, operates, develops and franchises various restaurants under Chili&#39;s Grill &amp; Bar (Chili&#39;s) and Maggiano&#39;s Little Italy (Maggiano&#39;s) brands.
<a href="https://www.zacks.com/stock/news/2252356/3-sector-etfs-stocks-to-bet-on-march-jobs-data?cid=CS-BENZ-FT-etf_news_and_commentary-2252356">To read this article on Zacks.com click here.</a>

3 Sector ETFs & Stocks to Bet on March Jobs Data

Southwest Gas Holdings, Inc.&#8216;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SWX#NYSE">SWX</a>) wholly-owned subsidiary Centuri Holdings, Inc. has launched a roadshow for the initial public offering (IPO) of&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/n38150895/southwest-gas-announces-launch-of-centuri-initial-public-offering-roadshow" rel="noreferrer noopener">12.40 million shares of Centuri</a>.
Centuri has granted the underwriters a 30-day option to purchase up to an additional 1.86 million shares and expects the IPO price to be between $18.00 and $21.00 per share.&nbsp;
Centuri has been approved to list its shares on the New York Stock Exchange under the ticker symbol &#8220;CTRI.&#8221;
As per a regulatory filing, Icahn Partners LP and Icahn Partners Master Fund LP, the investment entities affiliated with billionaire Carl Icahn, have agreed to purchase in a concurrent private placement 2.59 million shares of Centuri common stock at a price per share equal to the initial public offering price per share in this offering.
Last month, Southwest Gas announced that Centuri Holdings has publicly filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) relating to a proposed initial public offering&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/03/n37899969/southwest-gas-announces-that-centuri-files-public-registration-statement" rel="noreferrer noopener">of its common stock</a>.
Investors can gain exposure to SWX stock via&nbsp;LeaderShares Activist Leaders ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ACTV#NYSE">ACTV</a>) and&nbsp;Invesco Building &amp; Construction ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>).
Price Action: SWX shares traded lower by 0.74% at $75.19 on the last check Tuesday.
Image: Shutterstock/ Andrii Yalanskyi

Small Cap

IPOs

ACTV

Southwest Gas Unit Centuri Gears Up For IPO: Details

The health care industry contributed more than a quarter of the <a href="https://benzingalabs.com/accounts/login/?next=/">275,000 jobs created in the U.S. in February</a>, as the industry continues to seek hospital and ambulatory care staff.
Data from the Bureau of Labor Statistics, published on Friday, showed that of the 275,000 increase in payrolls in February, 67,000 were added in the health care sector, well above the 12-month average of 58,000.
Of these 67,000 new jobs, around 28,000 were added in ambulatory health care — medical services provided on an outpatient basis. Another 28,000 were employed in hospitals and around 11,000 were provided to nursing and residential care workers.
Health care has become one of the best-performing investment sectors as new blockbuster drugs such as weight-loss treatments become increasingly popular. The Health Care Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLV#NYSE">XLV</a>), an exchange traded fund that tracks the industry, has gained nearly 8% this year.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/08101930/newplot-2024-03-08T141912.888.png" alt="" class="wp-image-244851" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/08101930/newplot-2024-03-08T141912.888.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/08101930/newplot-2024-03-08T141912.888-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Also Read: <a href="https://www.benzinga.com/news/econ-s/24/03/37558250/february-jobs-growth-beats-estimates-but-unemployment-rate-rises-to-3-9-wage-growth-eases">February Jobs Growth Tops Forecasts, Yet Higher Jobless Rate, Easing Wages Give Green Light To Fed Rate Cuts</a>
<h1 class="wp-block-heading">Government Employment Steady</h1>
Government employment was the next biggest growth area, with 52,000 new jobs being created — close to the 12-month average of 53,000 — as local governments added 26,000 and federal government added 9,000.
Construction jobs increased by 23,000, beating the 12-month average of 18,000 thanks to growth in heavy and civil engineering jobs. The construction industry has gained momentum in 2024 and the Invesco Building &amp; Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>) is up nearly 13% year-to-date.
Transportation and warehousing jobs rose by 20,000, with 17,000 new couriers and messengers added to the labor force after losing around 70,000 in the prior three months. Air transportation gained 4,000. However, the sector as a whole is down by 144,000 since peaking in July 2022.
The iShares Transportation Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYT#NYSE">IYT</a>) has gained nearly 7% so far in 2024.
Retail trade employment was up by 19,000 jobs in February, showing little net change over the past year. The SPDR S&amp;P Retail ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XRT#NYSE">XRT</a>) is up nearly 5% year-to-date.
Now Read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37544925/apple-vs-nvidia-only-one-added-1-trillion-in-67-days-as-battle-for-mega-cap-dominan">Apple Vs. Nvidia: Only One Added $1 Trillion In 67 Days As Battle For Mega-Cap Dominance Continues</a>

iShares Dow Jones Transportation Average Index Fund

Health Care Workers Underpin US Jobs Growth In February

There&#39;s no denying that U.S. housing data has been weak in recent months, as inventory shortage has started taking toll on sales&#39; pace and pushed average home prices higher nationwide. Additionally, the U.S. Government&#39;s latest move of imposing tariff on imported steel and aluminum is also niggling investors.
Nonetheless, overlooking the sector will not be advisable, as the industry looks equally good for the balance of 2018 banking on strong fundamentals, signaling a profitable investment opportunity.Consistent job growth along with seemingly high homebuilders&#39; confidence is expected to show strong footing.
<h3>What Numbers Have To Say</h3>
After performing remarkably well in 2017, housing sales are trending down for both existing and new homes. Sales of new homes in the United States dropped 1.5% in April after gaining in March, per the latest report of the Commerce Department. In fact, new home sales faltered in three of the last four months this year. Housing starts and building permits also fell 3.7% and 1.8%, respectively, in the month.
Moreover, existing-home sales faltered in April on both a monthly and annualized basis, according to the National Association of Realtors, after moving upward for two straight months. Total existing-home sales decreased 2.5% in April from March. With this decline, sales are now 1.4% below a year ago and have fallen year-over-year for two straight months.
<h3>Hang-Ups</h3>
A tight labor market, limited land availability and a constrained mortgage environment are restricting homebuilders to respond to growing demand. Meanwhile, there are other factors that can deal a fresh blow to the housing industry. The U.S. Government&#39;s recent move of imposing tariff on imported steel and aluminum has spurred concerns among investors about certain U.S. sectors, particularly construction.
The cost of goods used in construction increased 6.4% in April at the fastest year-over-year rate since 2011. Prices surged for a wide range of building materials, including many that are subject to proposed tariffs, which is expected to further push prices higher and cause scarcities, per the latest report by the Associated General Contractors of America of Labor Department. The report further revealed that the new data indicates many firms are already being squeezed by higher materials prices that they are unable to pass along to their customers.
This apart, there are concerns over chances of a series of interest rate hikes by the Federal Reserve or Fed. The Fed last raised interest rates in March, by a quarter of a percentage point. The target range for benchmark short-term interest rate stands between 1.5% and 1.75%. This was the sixth-rate hike undertaken by the Fed since 2015. The Fed expects to increase interest rates two more times in 2018. Fed officials now project a median federal funds rate of 2.9% by the end of 2019, which indicates three rate hikes in 2019 against two predicted in the last Fed meeting in December 2017. They expect the rate to move up to 3.4% in 2020 from the previous expectation of 3.1%.
Mortgage rates, which loosely follow the yield on the 10-year Treasury, started the year at around 4% but began rising thereafter. Mortgage rates are surging in proportion to U.S. government bond yields in anticipation of higher rates of inflation and further monetary tightening by the Fed.
Additionally, to make up for rising labor costs, homebuilders are being compelled to raise home prices to maintain margins that is expected to deter entry-level homebuyers. April&#39;s median sales price of existing homes grew 5.3% from the comparable period a year ago, marking the 74th straight month of year-over-year gains. In 2017, prices increased 5.8%, rising for the sixth straight year. Additionally, the median sales price of new homes sold in April was 0.4% higher than a year ago. Overall, rising prices may keep home buyers at bay with many postponing their search for the time being.
<h3>All Is Not Lost Though</h3>
Although homebuilders acknowledge the rise in labor shortage and land/labor cost, they in general expect the housing market to continue to recover this year in tandem with steady economic growth.
Consistent job growth, growing interest from first-time homebuyers as well as seemingly high homebuilder confidence are adding to the momentum. Although Fed policymakers are looking at three rate hikes this year, setting the stage for an increase in mortgage rates, Americans are seeing wages growing at the quickest pace since the end of the last decade.
Despite the month-over-month hiccups, new home sales were up 11.6% year over year in April. Additionally, April housing starts were up 10.5% year over year on a 7.2% increase in single-family homes, and a 19.1% surge in apartments. Permits were 7.7% above the April 2017 rate of 1.26 million units prompted by a 7.9% surge in single-family homes and 6.4% growth in buildings with five units or more.
Overall, solid builders&#39; confidence in the market along with robust economic growth and a consistent job market raise hopes for the U.S. housing market. Builders&#39; confidence increased two points to 70 in May from April. Importantly, the reading was above the 50 mark in the first five months of 2018, indicating a favorable outlook. Moreover, this is the fourth time in 2018 that the index has reached 70.
<h3>ETFs To Tap The Sector</h3>
We take a look at three construction ETFs that are poised to gain from the upswing in the housing market.
SPDR S&amp;P Homebuilders ETF&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xhb#NYSE">XHB</a>)
The fund employs a replication strategy in seeking to track the performance of the S&amp;P Homebuilders Select Industry Index, which is an equal-weighted index of the homebuilding segment of a U.S. total market composite index. The fund has an expense ratio &ndash; an annual fee &ndash; of 0.35%. This fund holds 35 stocks with about 46.5% invested in the top 10 holdings.
iShares U.S. Home Construction ETF&nbsp;(BATS:ITB)
ITB tracks the Dow Jones U.S. Select Home Construction Index, which measures the performance of the U.S. home construction sector. This fund holds 47 securities in its basket and has an expense ratio of 0.44%.
PowerShares Dynamic Building &amp; Construction Fund&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pkb#NYSE">PKB</a>)
PKB seeks to match the performance of Dynamic Building &amp; Construction IntellidexSM Index, which is composed of U.S. building and construction companies. The top three sector allocations are Industrials (42.8%), Consumer Discretionary (36.4%), and Materials (20.8%). Yet, the fund is more expensive than many other options in the space, charging 63 basis points in annual fees.
<h3>To Sum Up</h3>
Investors&#39; sentiments could be dampened by the possibility of an interest rate hike. Also, skilled labor shortage is a cause for concern as demand continues to rise. Rising materials, land and labor costs too are restricting margins as these limit homebuilders&#39; pricing power.
However, there are plenty of reasons to be optimistic about the broader housing sector over both the short and the long terms. In this context, the above-mentioned ETFs might be sound bets to play the sector.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/03/11409715/wells-fargo-finds-a-litany-of-reasons-to-upgrade-kb-hom">Wells Fargo Finds &#39;A Litany Of Reasons&#39; To Upgrade KB Home</a> 
<a href="https://www.benzinga.com/government/18/05/11699594/california-mandates-solar-on-new-homes-who-wins">California Mandates Solar On New Homes, Who Wins?</a>

Specialty ETFs

Econ #s

Real Estate

What Lies Ahead For Housing ETFs?

Wall Street is going gaga over the likely benefits of Trump&#39;s proposed tax reform (or reduction). Yet, there are some corners of the economy that are finding it tough to cheer. On Nov 2, House Republicans provided the layout for the biggest changes in the U.S. tax code in <a href="http://www.chicagotribune.com/news/nationworld/politics/ct-gop-tax-cut-plan-20171102-story.html">three decades</a>.
Below we highlight the likely winners and losers of the proposed Tax reform. The plan would reduce the corporate tax rate <a href="http://www.latimes.com/politics/la-na-pol-gop-tax-cuts-20171102-htmlstory.html">to 20% from 35%</a> and modify the individual rates from seven brackets to four (read<a href="https://www.zacks.com/stock/news/279566/gop-nears-tax-reform-buy-these-etfs">: GOP Nears Tax Reform: Buy These ETFs</a>).
<h3>
	Winners</h3>
Financial
As per an article published on CNBC, a senior analyst at AB Bernstein noted that &quot;large banks likely would see 2018 earnings per share <a href="https://www.cnbc.com/2017/10/04/wall-street-tallying-up-windfall-it-will-get-from-trump-tax-plan.html">jump by 12 to 20</a> percent, while midcaps would see growth of 15 to 25 percent.&quot; Compared with the other sectors, the gain from tax reforms for large-cap banks would be in the 4% to 12% range while small-caps would see a boost of 7% to 17%, according to the article published on CNBC. This brings funds like PowerShares KBW Regional Bank Portfolio KBWR in the spotlight. KBWR was up 0.8% on Nov 2 (read: <a href="https://www.zacks.com/stock/news/281525/powell-to-lead-fed-best-etf-strategies">Powell to Lead Fed: Best ETF Strategies</a>).
Large-Cap Growth
Most analysts say that big corporates will benefit from these tax cuts. First, a reduction from 35% to 20% and then &quot;more favorable treatment of income earned abroad, which is either not taxed or taxed at an <a href="https://www.vox.com/2017/11/2/16596896/house-republican-tax-reform-cuts-trump-ryan-explained">even lower rate than 20 percent</a>&quot; should prove great for large-cap growth ETFs like iShares Russell 1000 Growth ETF IWF. Notably, large-cap stocks have considerable foreign exposure and are thus beneficiaries of such bills. The fund IWF added about 0.1% on Nov 2.
<h3>
	Losers</h3>
Housing&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 
The new plan intends to rule out many prevalent deductions. The GOP-backed Tax Cuts and Jobs Act <a href="https://www.washingtonpost.com/news/business/wp/2017/11/02/housing-stocks-sink-as-gop-proposes-cut-to-mortgage-interest-deduction/?utm_term=.292b41c55690">would cut the mortgage interest tax deduction</a> for new home loans. &quot;Mortgage interest deductions would be limited to new loans of no more than $500,000, down from the current $1 million. Deductions for second homes would no longer be allowed. Property tax deductions <a href="http://www.latimes.com/politics/la-na-pol-gop-tax-cuts-20171102-htmlstory.html">would be capped at $10,000</a>,&quot; as per a source.
So far, Americans resorted to this popular tax break to lower the purchase cost of home. The change may push up already-higher housing prices. As result, housing ETFs like SPDR S&amp;P Homebuilders ETF XHB, iShares US Home Construction ETF ITB and PowerShares Dynamic Building &amp; Construction ETF PKB fell 2.5%, 0.9% and 1.5% on Nov 2, respectively.
Healthcare
The bill also eyes annulling of <a href="https://www.vox.com/policy-and-politics/2017/11/2/16595980/winners-losers-house-republican-tax-bill">medical expense deduction</a>. Under the existing law, individuals who expend <a href="http://www.businessinsider.in/The-GOPs-tax-plan-could-make-it-harder-to-get-tax-deductions-for-medical-expenses/articleshow/61467722.cms">more than 10% of their income</a> on medical expenses are permissible to subtract part of those costs from their taxes. But the proposed new bill would eliminate such deductions. Omitting the deduction will help Republicans with <a href="https://www.vox.com/policy-and-politics/2017/11/2/16595980/winners-losers-house-republican-tax-bill">about $10 billion</a>. Health Care Select Sector SPDR ETF XLV lost about 0.4% on Nov 2 (read: <a href="https://www.zacks.com/stock/news/279399/healthcare-etfs-head-to-head-xlv-vs-vht">Healthcare ETFs Head to Head: XLV vs. VHT</a>).
Want key ETF info delivered straight to your inbox?
Zacks&#39; free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. <a href="https://www.zacks.com/registration/newsletter/?type=FND&amp;ADID=Zcom_commentary_fundnewsletter_moneysense_ECD_ETF">Get it free &gt;&gt;</a>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-281708" target="_blank">Click to get this free report</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=XLV&amp;split=1&amp;cid=CS-BENZ-FT-281708">SPDR-HLTH CR (ETF:XLV): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=XHB&amp;split=1&amp;cid=CS-BENZ-FT-281708">SPDR-SP HOMEBLD (ETF:XHB): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=ITB&amp;split=1&amp;cid=CS-BENZ-FT-281708">ISHARS-US HO CO (ETF:ITB): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=PKB&amp;split=1&amp;cid=CS-BENZ-FT-281708">PWRSH-DYN BLDG (ETF:PKB): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=KBWR&amp;split=1&amp;cid=CS-BENZ-FT-281708">PWRSH-KBW RBP (ETF:KBWR): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=IWF&amp;split=1&amp;cid=CS-BENZ-FT-281708">ISHARS-RS 1K GR (ETF:IWF): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=TAXR&amp;split=1&amp;cid=CS-BENZ-FT-281708">US-TAX REFORM (TAXR): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/stock/news/281708/winners-loser-of-trumps-tax-reform?cid=CS-BENZ-FT-281708">To read this article on Zacks.com click here.</a> 
	&nbsp; 
	<a href="http://www.zacks.com/">Zacks Investment Research</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=ZACKS_PFP_7BEST_ETF">Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report</a>

Movers & Shakers

Politics

Legal

KBWR

Early Winners And Loser Of Trump's Tax Reform

Finally, the windfall of hurricanes Harvey and Irma are being realized. U.S. factory activity jumped to a more than 13-year high in September thanks to higher new orders and raw material prices. The Institute for Supply Management&#39;s Manufacturing PMI in the United States increased to 60.8 in September 2017 from 58.8 in August, trumping <a href="https://tradingeconomics.com/united-states/business-confidence">market expectations of 58</a>.
Out of the 18 manufacturing industries, as many as 17 registered expansion last month. Just the reading of one industry, Furniture &amp; Related Products, showed sequential contraction in September. In fact, a rebound in construction spending in August has also been noticed. Construction spending increased 0.5% to $1.21 trillion in August. However, July&#39;s construction expenditures were revised down to a 1.2% decline instead of the previously reported 0.6% retreat.
This upbeat performance was sort of expected. Hurricane Harvey flooded Texas at August-end and Irma demolished Florida in early September. So, the need for reconstruction of infrastructure and remodeling of houses was higher post hurricanes (read: <a href="Top%20ETF%20Stories%20of%20Third%20Quarter">Top ETF Stories of Third Quarter</a>).
Against this backdrop, we highlight below a few ETF options that can be good momentum plays.
Industrial Innovation ETF ARKQ 
Most of the industrial ETFs were in the green post release of manufacturing data. While there are several ETFs available in this space, ARKQ is one of the top beneficiaries. This actively managed ETF seeks long-term capital appreciation by investing in companies that benefit from the development of new products or services, technological improvements and advancements in scientific research. The fund gained about 1.1% on Oct 2 (<a href="https://www.zacks.com/funds/etfs/etf-categories/Industrials-ETFs-14">see all industrials ETFs here</a>).
PowerShares Dynamic Building &amp; Construction ETF PKB
Though nonresidential construction spending could decline in September thanks to back-to-back storms, ongoing activity should be higher in the sector. As per the Commerce Department, Texas and Florida made up about 22% of U.S. private nonresidential construction spending in 2016, as quoted on <a href="https://www.cnbc.com/2017/10/02/september-ism-manufacturing-index-august-construction-spending.html">CNBC.com</a>. This indicates the extent of construction activity in the region and PKB is likely to gain from this trend. The fund gained about 0.7% on Oct 2.
First Trust Multi Cap Growth AlphaDEX Fund FAD
The manufacturing sector makes up about <a href="https://www.cnbc.com/2017/10/02/september-ism-manufacturing-index-august-construction-spending.html">12%</a> of the U.S. economy. So, higher activity in this arena clearly points to a rebounding economy. This makes the case for investing in growth ETFs like FAD sensible. The fund gained more than 0.6% on Oct 2 (read: <a href="https://www.zacks.com/stock/news/275518/market-hits-new-record-high-growth-etfs-top">Market Hits New Record High: Growth ETFs Top</a>).
Fidelity Dividend ETF for Rising Rates FDRR
The stronger the economy, the higher the chances of a rate hike in December. In any case, the Fed has been acknowledging the need for a rate hike in the final month of the year. In late September, &quot;the dot plot from the last meeting showed <a href="https://www.housingwire.com/articles/41399-fed-chair-yellen-defends-need-for-december-rate-hike">11 out of the Fed&#39;s 16</a> members are forecasting a rate hike in December.&quot;
Now, upbeat manufacturing data has cemented that possibility. Benchmark 10-Year Treasury bond yield rose to 2.34% on Oct 2 from 2.33% the day before. In this scenario, FDRR can be a good bet. The fund added about 0.5% on Oct 2 (read: <a href="https://www.zacks.com/stock/news/276665/best-etf-strategies-for-a-hawkish-fed">Best ETF Strategies for a Hawkish Fed</a>).
First Trust Small Cap Core AlphaDEX ETF FYX
As the greenback has gained post manufacturing data, chances of outperformance in small-cap ETFs are higher now. This is because small-cap stocks are more domestically focused. The fund added about 1.3% on Oct 2.
Want key ETF info delivered straight to your inbox?
Zacks&#39; free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. <a href="https://www.zacks.com/registration/newsletter/?type=FND&amp;ADID=Zcom_commentary_fundnewsletter_moneysense_ECD_ETF">Get it free &gt;&gt;</a>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. <a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=BENZ_CONTENT_ZER_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;cid=CS-BENZ-FT-277776" target="_blank">Click to get this free report</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=PKB&amp;split=1&amp;cid=CS-BENZ-FT-277776">PWRSH-DYN BLDG (ETF:PKB): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=FDRR&amp;split=1&amp;cid=CS-BENZ-FT-277776">FID-DIV RR (FDRR): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=FYX&amp;split=1&amp;cid=CS-BENZ-FT-277776">FT-SC VALUE (ETF:FYX): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=ARKQ&amp;split=1&amp;cid=CS-BENZ-FT-277776">ARK-INDUS INNOV (ARKQ): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=ETF225&amp;adid=BENZ_CONTENT_ETF_ARTCAT_ETF_NEWS_AND_COMMENTARY&amp;d_alert=rd_final_rank&amp;t=FAD&amp;split=1&amp;cid=CS-BENZ-FT-277776">FT-MULTICAP GR (ETF:FAD): ETF Research Reports</a> 
	&nbsp; 
	<a href="http://www.zacks.com/stock/news/277776/5-etfs-to-buy-on-13-year-high-manufacturing-activity?cid=CS-BENZ-FT-277776">To read this article on Zacks.com click here.</a> 
	&nbsp; 
	<a href="http://www.zacks.com/">Zacks Investment Research</a> 
	&nbsp; 
	<a href="http://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194&amp;ADID=ZACKS_PFP_7BEST_ETF">Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report</a>

ARKQ

First Trust Multi Cap Growth AlphaDEX Fund

FDRR

5 ETFs To Buy On 13-Year High Manufacturing Activity

Dating back to last year, infrastructure-related investments have been bid up on expectations that infrastructure spending is slated to increase in significant fashion.
President Donald Trump&#39;s infrastructure efforts, which by some accounts will not begin in earnest until next year, are ambitious. On the campaign trail, Trump discussed spending up to $1 trillion on shoring up America&#39;s bridges, highways, railroads and more. Building and construction and infrastructure ETFs have also been boosted by<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/01/8958756/trumps-wall-plans-lift-this-etf"> Trump&#39;s controversial plan to build a wall</a> around the U.S./Mexico border.&nbsp;
<h3>An ETF For Infrastructure</h3>
The PowerShares Dynamic Building &amp; Construction Portfolio (ETF) (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) is one ETF that has benefited from those themes. Year-to-date, PKB is up almost 4.5 percent, and while the ETF is trailing the S&amp;P 500, there are some fundamental factors that bode well for it.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/03/9125774/hundreds-of-companies-bid-to-build-trumps-security-wall">Hundreds Of Companies Bid To Build Trump's Security Wall</a>
&ldquo;The Dodge Momentum Index tracks new construction activity in the US and includes residential and nonresidential building activity. The index tends to lead construction spending by about a quarter. The correlation between the index and construction activity is a robust 0.77,&rdquo; said PowerShares <a href="https://www.blog.invesco.us.com/three-reasons-building-and-construction-stocks-have-risen/">in a recent note</a>.
 &ldquo;In recent months, the index has seen some of the most vibrant growth rates since the early 1990s, which should augur well for a pickup in construction spending over the coming months, in my view. The index level has been above 140 for four of the past five months &mdash; levels not seen since early 2006.&rdquo;
<h3>PKB's Strategy</h3>
PKB tracks &ldquo;companies that are primarily engaged in providing construction and related engineering services for building and remodeling residential properties, commercial or industrial buildings, or working on large-scale infrastructure projects, such as highways, tunnels, bridges, dams, power lines, and airport,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKB">according to PowerShares</a>.
<h3>A Word Of Caution, And Insight Into The Archiectural Billings Index</h3>
Investors should be careful to not view PKB as the most direct ETF play on homebuilders equities. Of the 35 stocks held by the ETF, just three are pure play homebuilders, and that trio combines for just 12.5 percent of the ETF&#39;s weight.
With its exposure to materials companies, PKB is levered to increases in nonresidential construction as well.
&ldquo;Another leading indicator of construction activity is what&rsquo;s known as the Architectural Billings Index. This index is based on a participant survey that asks architectural firms whether billings have increased, decreased or stayed the same in the past month. A value of over 50 indicates an expansion in billings. The survey tends to lead nonresidential construction activity by nine to 12 months,&rdquo; said PowerShares.
Investors should also note that PKB is not a large-cap ETF. In fact, more than 89 percent of the fund&#39;s holdings are either mid- or small-cap stocks.

Long Ideas

A Dynamic Building ETF

Politicians are no strangers to controversy and many are familiar with campaign trail bluster that ultimately goes unfulfilled. Love him or hate, President Donald Trump is moving forward with his plan to build a wall around the U.S.-Mexico border.

	So Trump, no stranger to controversy, is at least attempting to make good on one of his campaign trail promises, which is more than can be said of many politicians. A cornerstone of Trump&#39;s campaign was stricter immigration policy. In addition to the border wall effort, the new president has also pledged <a href="http://www.latimes.com/nation/politics/trailguide/la-na-trailguide-updates-we-will-build-the-wall-trump-to-1485314982-htmlstory.html">to cut federal funding to sanctuary cities</a>, or those cities opting to stand in violation of federal law in order to harbor illegal immigrants.

	To be clear, this article is neither condemnation nor endorsement of Trump&#39;s immigration policies or the wall effort. It&#39;s merely to highlight an investment opportunity that is positively responding to the effort to build the wall. Enter the PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>).

	The PowerShares Dynamic Building &amp; Construction Portfolio was one of a few dozen exchange traded funds printing all-time highs on Wednesday. Some of the ebullience surrounding PKB is being attributed to strong housing data, but PKB is not a homebuilder ETF on par with a fund such as the iShares U.S. Home Construction ETF (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>).

	Rather, the PowerShares offering tracks &ldquo;companies that are primarily engaged in providing construction and related engineering services for building and remodeling residential properties, commercial or industrial buildings, or working on large-scale infrastructure projects, such as highways, tunnels, bridges, dams, power lines, and airport,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKB">according to PowerShares</a>.

	Home to 30 stocks, PKB holds names such as Martin Marietta Materials Inc. (NYSE: <a class="ticker" href="/stock/mlm#NYSE">MLM</a>) and Vulcan Materials Co. (NYSE: <a class="ticker" href="/stock/vmc#NYSE">VMC</a>), holdings that explain the ETF&#39;s leverage to speculation about Trump&#39;s wall plans.

	As <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/01/8945612/trumps-border-wall-a-look-at-the-numbers">Benzinga noted Wednesday</a>, The border wall will require an estimated $711 million of concrete and $240 million of cement. However, those materials costs pale in comparison to the estimated labor costs of building the wall. Trump has said the wall would cost an estimated $10&ndash;12 billion, but Bernstein Research pegs the actual number in the $15&ndash;25 billion range.

	However, even if Trump&#39;s wall desires are never realized, PKB can still benefit if the new president is able to push through parts of massive $1 trillion infrastructure effort. A glance at PKB&#39;s roster indicate the ETF is bound to benefit from that scenario just as it has wall chatter.

	PKB is up 6.2 percent since the start of 2017 and nearly 39 percent over the past year.

Trump's Wall Plans Lift This ETF

Following the <a href="http://www.masstransitmag.com/press_release/12272280/dart-rail-blue-line-extension-reenergizes-dallass-south-oak-cliff-community">opening of the most recent</a> Dallas Area Rapid Transit (DART) rail extension on October 24, DART has released a detailed report discussing the ways the system has positively impacted the local economy. This week marked the opening of a new three-mile DART extension connecting Ledbetter Station to the University of North Texas &ndash; Dallas&rsquo; campus.
According to the DART report, the system has been a win-win both for Dallas area travelers and the local economy.
&ldquo;Transit Oriented Development near DART Rail, like CityLine and the continued growth in the Cedars south of downtown Dallas, is driving the North Texas economic boom with more than $7 billion in economic impact from new or planned construction within a quarter mile of rail stations,&rdquo; the report read.
DART noted that rail line construction in 2014 and 2015 alone produced more than 43,000 local jobs. A study by the University of North Texas found <a href="http://www.fltod.com/research/tod_planning_and_fbc_outside_florida/muncipalities/dallas_region/tod_how_it_changed_north_texas.pdf">$5.3 billion in transit-oriented development</a> near DART Rail stations from 1996 to 2013.
The 93-mile-long rail station cost the state $5.5 billion to construct. But if DARTs numbers are correct, the system has already begun paying major dividends.
Both Hillary Clinton and Donald Trump <a href="http://www.businessinsider.com/donald-trump-and-hillary-clinton-agree-on-infrastructure-spending-2016-10">have pledged to invest heavily</a> in national <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/10/8597798/bernstein-sees-improving-volume-trends-across-the-board-">infrastructure</a> projects if elected. The economics of the DART system suggest it could be a solid model for the types of projects that could both directly and indirectly stimulate local economies.
So far this year, the PowerShares Dynamic Bldg. &amp; Const. (ETF) (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) is up 2.6 percent.
SPDR Series Trust (NYSE: <a class="ticker" href="/stock/xtn#NYSE">XTN</a>), the SPDR transportation ETF, is up 9.3 percent year-to-date.

Travel

Events

Media

Dallas Area Rapid Transit Details How DART Investment Drives Economic Value

The National Association of Realtors <a href="http://www.realtor.org/news-releases/2016/10/first-time-buyers-steer-existing-home-sales-higher-in-september">reported on Thursday</a> that existing home sales rose in September, marking a reversal from the previous two months, which saw a decline.
Total existing home sales for September rose 3.2 percent to a seasonally adjusted annual rate of 5.47 million after reading 5.30 million in August and also marks the highest since June's reading of 5.57 million.
September's existing home sales also mark an increase of 0.6 percent from the same month a year ago.
All major regions in the United States saw an increase in closings throughout September, and distressed sales fell to a new low of 4 percent of the market. 
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/general/education/16/10/8551249/the-u-s-cities-with-the-most-overvalued-and-undervalued-homes">The U.S. Cities With The Most Overvalued And Undervalued Homes</a></bzrelatedlink>
The median existing-home price for all housing types in September rose 5.6 percent from a year ago to $234,200 and marks the 55th consecutive month of year-over-year gains.
First-time buyers accounted for 34 percent of sales in September, which marks an increase from 31 percent in August and 29 percent a year ago. In fact, September's reading matches the highest seen since July 2012.
Lawrence Yun, NAR chief economist, says the two-month slump in existing sales reversed course convincingly in September. "The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale," he said. "Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month."
<h3>Related ETFs</h3>
<ul>
<li>SPDR S&amp;P Homebuilders (ETF) (NYSE: <a class="ticker" href="/stock/xhb#NYSE">XHB</a>) is down 8.71 percent over the last three-month period.</li>
<li>iShares Dow Jones US Home Const. (ETF) (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>) is down over 9.5 percent in the last three months.</li>
<li>PowerShares Dynamic Bldg &amp; Const. (ETF) (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) is down roughly 9 percent over the last three months.</li>
</ul>
<a href="https://pro.benzinga.com/?utm_source=Benzinga&amp;utm_medium=Benzinga%20Top%20of%20Article&amp;am%22%3">Full ratings data available on Benzinga Pro.</a>
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

REIT

Economics

Existing Home Sales Rebounded In September

Housing prices in the Seattle area rose 11 percent last year, marking a surge of nearly twice the national average.
Speaking to <a href="http://video.foxbusiness.com/v/4867886515001/seattle-the-next-san-francisco/?#sp=show-clips">Fox Business</a>, PwC Real Estate Trends' Mitch Roschelle said the sustainability of the growth seen in the Seattle market is a "concern," as the city is a "one-industry town" and not comparable to a more diversified city like San Francisco.
Roschelle said there is a lot of demand for housing in Seattle, particularly among graduating college students. On the other hand, while supply of new housing is increasing in the area, it is expensive and "really not affordable for the kids."
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/16/03/7721255/how-is-housing-shaping-up-for-2016">How Is Housing Shaping Up For 2016?</a></bzrelatedlink>
Roschelle added that the median price of a house across the United States is around $231,000. Meanwhile, the average housing price in Seattle is in the $400,000-range. As such, it is a "challenge" for first time home buyers to find housing in the surging market.
On the other hand, the average housing price in New York city region is $1.2 million &ndash; although much of the pricing comes from high-end properties in Manhattan.
"The high end supply of the market is over-developed," Roschelle said. "The low end supply is not available."
Finally, Roschelle suggested that in an era of rising home prices, it is "never a good idea" for first time buyers to wait, as they risk waiting too long and missing out on appreciating prices. However, he did acknowledge that even as a real estate expert, it may difficult to time the market.

Education

Housing Market Expert Explains Why Seattle Isn't The Next San Francisco

It has been a rough year for industrial stocks and exchange traded funds. The S&amp;P 500&#39;s fifth-largest sector weight and the second-largest in the Dow Jones Industrial Average has been stung by the strong dollar and slumping oil prices among other factors.

	Those factors and more have sent the Industrial Select Sector SPDR ETF (NYSE: <a class="ticker" href="/stock/xli#NYSE">XLI</a>), the largest exchange traded fund tracking the industrial sector, down 3.5 percent year-to-date. However, not industrial ETFs have been duds this year. Take the PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) for example. That ETF is up nearly 12 percent, making it <a href="http://alletf.com/">the best-performing industrial ETF on the year</a>.&nbsp;

	It name might imply that PKB is levered to the rally in homebuilders stocks, but a deeper look at the ETF reveals this is not a dedicated homebuilders fund. Rather, PKB includes exposure to &quot;engaged in providing construction and related engineering services for building and remodeling residential properties, commercial or industrial buildings, or working on large-scale infrastructure projects, such as highways, tunnels, bridges, dams, power lines, and airports,&quot;&nbsp;<a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKB">according to PowerShares</a>.

	Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/12/6072643/amazon-has-made-this-retail-etfs-year">Amazon Has Made This Retail ETF&#39;s Year</a>

	The takeaway there is that PKB, a strategic beta ETF, is a play on infrastructure spending. PKB follows the Dynamic Building &amp; Construction Intellidex Index, which, like the other PowerShares dynamic sector and industry ETFs, evaluates companies based on price momentum, earnings momentum, quality, management action and value.

	Home to 30 stocks, PKB&#39;s real estate exposure comes by way of just two homebuilders stocks &ndash;-&nbsp;D.R. Horton, Inc. (NYSE: <a class="ticker" href="/stock/dhi#NYSE">DHI</a>) and NVR, Inc. (NYSE: <a class="ticker" href="/stock/nvr#NYSE">NVR</a>) &ndash;- and home improvement giants Home Depot Inc&nbsp;(NYSE: <a class="ticker" href="/stock/hd#NYSE">HD</a>) and Lowe&#39;s Companies, Inc.&nbsp;(NYSE: <a class="ticker" href="/stock/low#NYSE">LOW</a>). Those stocks combine for 15.5 percent of PKB&#39;s weight. Home Depot is one of just nine members of the Dow Jones Industrial Average with a double-digit gain to this point in 2015.

	Although the overall outlook for industrials is murky heading into next year, PKB could once again be an exception to that trend, particularly if government spending on infrastructure projects picks up.

	&quot;Construction trends are also on the rise. The Architecture Firms Billing Index was 54.7 in July; any score above 50 indicates an increase in billings. As shown in the chart below, the Architecture Firms Billing Index typically comes out roughly a year ahead of the US Census Bureau&rsquo;s construction spending reports. The strength of the index augurs for positive growth in construction spending into mid-2016. There may be a short-term pause, but conditions are generally favorable, in my view,&quot; according to PowerShares.

Meet This Year's Best Industrial ETF

Last week was a wild one on Wall Street as stocks experienced one of the worst two-day declines in several years only to give way to a two-day rally, the likes of which had not been seen in four years.

	When the closing bell sounded Friday, the exchange traded funds tracking major U.S. equity benchmarks, such as the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>), finished the week higher, led by a 3.1 percent gain for the PowerShares QQQ (NASDAQ: <a class="ticker" href="/stock/qqq#NASDAQ">QQQ</a>). QQQ is the Nasdaq-100 tracking ETF.

	However, last week will not be remembered as a good one for ETFs at large due to an array of pricing issues during Monday&#39;s meltdown that left some ETF investors seething because they had taken unexpected (and large) losses.

	Headlines on the matter include verbiage such as &ldquo;ETF minefield,&rdquo; &ldquo;harsh lessons for ETF investors&rdquo; and &ldquo;<a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5787147/a-wild-day-for-a-beloved-momentum-etf">ETF flash crash</a>.&rdquo;&nbsp;

	This week brings a deluge of important economic data points, which should put the spotlight on plenty of well-known ETFs. From <a href="http://finance.yahoo.com/news/focus-turns-u-data-china-002834174.html">Reuters</a>: &ldquo;The economic figures will culminate in Friday&rsquo;s jobs report that should reveal more about the strength of the U.S. economy.

	Car sales, construction spending, the Federal Reserve&#39;s &#39;beige book&#39; and jobs growth may show the economy is strong enough to withstand the first rate hike in nearly a decade from the Federal Reserve, despite worries about a hard landing for China&rsquo;s economy.&nbsp;

	With so much U.S. economic data due out in the week ahead and speculation swirling that the Federal Reserve will not raise interest rates at its September meeting, the PowerShares DB US Dollar Index Bullish Fund (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>) should be getting plenty of attention.

	UUP, the U.S. Dollar Index tracking ETF, has traded lower over the past month due in large part to markets readjusting the view that the Fed is not as close to boosting borrowing costs as previously expected.

	The fallout from the dollar&#39;s retreat has been predictable: Currency hedged ETFs, such as the WisdomTree Europe Hedged Equity Fund (NYSE: <a class="ticker" href="/stock/hedj#NYSE">HEDJ</a>) and the Deutsche X-trackers MSCI EAFE Hedged Equity ETF (NYSE: <a class="ticker" href="/stock/dbef#NYSE">DBEF</a>), have been met with naysayers claiming the veracity of this year&#39;s hottest ETF trade is waning.

	Put simply, UUP, DBEF, HEDJ and related ETFs would love to see a surprisingly strong August jobs number that puts a September rate hike back in play. That would also be a <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5793768/an-etf-with-currency-hedged-compensation">crushing blow to dollar bears</a>.

	With construction spending data due out, obvious plays include the SPDR S&amp;P Homebuilders ETF (NYSE: <a class="ticker" href="/stock/xhb#NYSE">XHB</a>) and the PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>), which <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/08/5794003/building-something-with-this-construction-etf">we recently highlighted</a>.

	These ETFs were not immune to the broader market declines seen early last week, but they are in the midst of a substantial run of out-performance over broader equity benchmarks.

	All these data points we have been mentioning here should have some impact on oil prices, which closed last week in style. The downtrodden&nbsp;

	United States Oil Fund (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) surged 12.5 percent last week, but reminding investors just how bad things have been for that ETF, USO is still almost 23 percent below its 200-day moving average.

	Some traders are saying last week&#39;s oil rally was no more than short-covering. If that theory proves accurate, risk-tolerant traders might want to cozy up to the ProShares UltraShort Bloomberg Crude Oil (NYSE: <a class="ticker" href="/stock/sco#NYSE">SCO</a>) in the days ahead.

Short Ideas

Eurozone

Commodities

Currency ETFs

Previews

Forex

Global

DBEF

HEDJ

PowerShares DB US Dollar Index Bullish Fund

ETFs For The Week Ahead: Hoping For Some Calm

Although they have not been immune to the recent pullback in U.S. equities, homebuilders stocks and the relevant exchange traded funds have been leadership groups this year.

	The SPDR S&amp;P Homebuilders ETF (NYSE: <a class="ticker" href="/stock/xhb#NYSE">XHB</a>) and the iShares U.S. Home Construction ETF (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>), the two largest homebuilders ETFs, have each returned more than 3 percent, a far cry from the dismal performance offered by the S&amp;P 500. Going forward, it could take more than the Federal Reserve incrementally boosting interest rates to derail momentum in the construction and homebuilders industry.

	&ldquo;Real estate is one area of the US economy showing undisputed strength, and recent data argues for continued expansion, in my view.&nbsp;With so much momentum built up, I expect that it&rsquo;s going take more than a few small rate hikes by the Federal Reserve to dampen this story,&rdquo; according to a&nbsp;<a href="http://www.blog.invesco.us.com/investing-in-a-builders-market">note from PowerShares</a>, the fourth-largest U.S. ETF issuer.

	Speaking of momentum with construction and homebuilders stocks, behold the PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>), an ETF that has returned 6.8 percent year-to-date. The momentum factor, in part, serves as the backstop for PKB, which weights its 30 holdings by price momentum, earnings momentum, quality, management action, and value.

	What is important to note about PKB, beyond its stellar performance and weighting methodology, is that this is far from a dedicated homebuilders ETF on par with the aforementioned ITB. Rather, PKB includes exposure to &ldquo;engaged in providing construction and related engineering services for building and remodeling residential properties, commercial or industrial buildings, or working on large-scale infrastructure projects, such as highways, tunnels, bridges, dams, power lines, and airports,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=PKB">according to PowerShares</a>.

	In terms of its homebuilders exposure, PKB gets that via derivatives plays such as Home Depot Inc. (NYSE: <a class="ticker" href="/stock/hd#NYSE">HD</a>) and Lowes Companies Inc. (NYSE: <a class="ticker" href="/stock/low#NYSE">LOW</a>) and by way of an almost 53 percent industrial sector weight that includes direct and indirect residential real estate exposure.

	While it is residential real estate that investors and the financial media are infatuated with when it comes to various monthly data points, rising construction spending is a clear catalyst for PKB going forward.

	&ldquo;Construction trends are also on the rise. The Architecture Firms Billing Index was 54.7 in July; any score above 50 indicates an increase in billings. As shown in the chart below, the Architecture Firms Billing Index typically comes out roughly a year ahead of the US Census Bureau&rsquo;s construction spending reports. The strength of the index augurs for positive growth in construction spending into mid-2016. There may be a short-term pause, but conditions are generally favorable, in my view,&rdquo; according to PowerShares.

Intraday Update

Building Something With This Construction ETF

Pending home sales rebounded in July, although housing-related stocks responded with continued down ticks.

	A closely watched measure of sales contract signings climbed 3.3 percent in July from June, but remains 2.1 percent below the level of a year ago, according to the National Association of Realtors.

	Analysts expected contract signings to gain 0.5 percent in July.

	But three housing-related exchange-traded funds were down Thursday: SPDR S&amp;P Homebuilders ETF (NYSE: <a class="ticker" href="/stock/xhb#NYSE">XHB</a>) fell 0.85 percent; U.S. Home Construction ETF (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>) was off 0.2 percent and PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) dropped 0.3 percent.

	Yet the National Association of Realtors&#39; pending home sales index is at its highest level since August 2013, and is above what&#39;s considered an average level of contract activity for the third consecutive month.

	&quot;Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012,&quot; said the real estate group&#39;s economist Lawrence Yun.

	But on Monday, the Commerce Department reported a 2.4 percent decline in July new home sales to an annual rate of 412,000.
	On the other hand, the National Association of Realtors said last week that existing home sales grew 2.4 percent in July.

Pending Home Sales Rebound In July, Builders' Stocks Unmoved

Thanks to improving house and jobs data, a pair of the best-performing sector ETFs in 2012 have been those with heavy exposure to the residential real estate market. Through 10 months of trading, the iShares Dow Jones U.S. Home Construction Index Fund (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>) and the the SPDR S&amp;P Homebuilders ETF (NYSE: <a class="ticker" href="/stock/xhb#NYSE">XHB</a>) have blown other high-flying sectors.

The $1.5 billion iShares Dow Jones U.S. Home Construction Index Fund has surged 78 percent this year, including paid dividends. The $1.9 billion SPDR S&amp;P Homebuilders ETF has jumped 58 percent. Said another way, if one chooses to ignore ITB and that ETF's amazing run, there is still no ignoring some of the other marquee ETFs XHB has outperformed.

XHB has offered nearly quadruple the gains of the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>). High-flying biotech ETFs have been no match for XHB and ITB, either. XHB has done better than twice as well as the SPDR S&amp;P Biotech ETF (NYSE: <a class="ticker" href="/stock/xbi#NYSE">XBI</a>) this year. 

XHB is up nearly five times as much as the iShares Dow Jones U.S. Technology Sector Index Fund (NYSE: <a class="ticker" href="/stock/iyw#NYSE">IYW</a>), the ETF with the largest weight to Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>). The oft-overlooked PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) has even gotten in on the act with a 39.3 percent year-to-date gain. 

All that good cheer has ITB and XHB looking quite pricey on a valuation basis. Technology is often the sector most pointed as being home to elevated price-to-earnings and other valuation metrics. A look at IYW shows that ETF has <a href="http://us.ishares.com/product_info/fund/overview/IYW.htm?fundSearch=true&amp;qt=IYW">a P/E ratio of 19 and a price-to-book ratio of 4.77</a>. 

ITB, an ETF that allocates over 28 percent of its weight to Lennar (NYSE: <a class="ticker" href="/stock/len#NYSE">LEN</a>), Pulte (NYSE: <a class="ticker" href="/stock/phm#NYSE">PHM</a>) and DR Horton (NYSE: <a class="ticker" href="/stock/dhi#NYSE">DHI</a>), has a P/E ratio north of 30. That is even above the P/E on the First Trust Dow Jones Internet Index Fund (NYSE: <a class="ticker" href="/stock/fdn#NYSE">FDN</a>), an ETF that devotes 17.4 percent of its weight to Google (NASDAQ: <a class="ticker" href="/stock/goog#NASDAQ">GOOG</a>) and Amazon (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>).

The P/E ratios for SPDRs are calculated differently than on iShares ETFs, but ITB still sports a P/E ratio of almost 21 and price-to-book ratio of 2.66. That ETF has a price/cash flow ratio of nearly 15, <a href="https://www.spdrs.com/product/fund.seam?ticker=XHB">according to State Street data</a>.

It may be stretched valuations that has prompted some recent bearish options activity in the two ETFs as Street One Financial highlighted in a recent note.

"It is feasible that the recent bearish looking speculation in ITB options as well as in related ETF XHB, is perhaps a ‘valuation call' by fundamentally focused investors that are looking for a potential correction in the Homebuilders/Construction sector. It will be interesting to watch funds such as these heading into the final weeks of the trading year of 2012 to see if investor behavior is altered at all in terms of a possible acceleration of activity given any year end tax considerations," said Street One in the note. 

With ITB trading around $21, open interest in the November $21 puts is almost 1,200 contracts while open interest in the November $20 puts is over 2,250 contracts, <a href="http://www.optionmonster.com/quotes/?symbol=ITB">according to Options Monster data</a>. 

XHB is flirting with $27, so can be perceived as interesting that open interest in the November $24 puts is over 32,600 contracts and open interest in the November $25 puts is nearly 10,000 contracts, according to Options Monster.

For more on high P/E ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/05/2594582/4-high-pe-etfs-ibb-igv-pnqi">here</a>.

Options

AAPL

AMZN

First Trust Dow Jones Internet Index Fund

GOOG

iShares Dow Jones US Technology Sector Index Fund

After Surging, Homebuilder ETFs Look Pricey 

The Consumer Discretionary sector ranks seventh out of the ten sectors as detailed in my <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">Sector Rankings for ETFs and Mutual Funds</a>. It gets my Neutral rating, which is based on aggregation of ratings of 17 ETFs and 27 mutual funds in the Consumer Discretionary sector as of October 10, 2012. Prior reports on the best &amp; worst ETFs and mutual funds in every sector and style are <a href="http://www.newconstructs.com/nc/research/report/etf-and-fund-reports.htm">here</a>.

	Figure 1 ranks from best to worst the nine Consumer Discretionary ETFs that meet our liquidity standards and Figure 2 shows the five best and worst-rated Consumer Discretionary mutual funds. Not all Consumer Discretionary sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 25 to 372), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst ETFs and mutual funds, which allocate too much value to Neutral-or-worse-rated stocks.

	To <a href="http://blog.newconstructs.com/2012/10/09/how-to-find-the-best-etfs-2/">identify the best</a> and <a href="http://blog.newconstructs.com/2012/04/05/how-to-avoid-the-worst-etfs/">avoid the worst</a> ETFs and mutual funds within the Consumer Discretionary sector, investors need a <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">predictive rating</a> based on (1) <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">stocks ratings</a> of the holdings and (2) the <a href="http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/">all-in expenses</a> of each ETF and mutual fund. Investors need not rely on backward-looking ratings. My fund rating methodology is detailed <a href="http://blog.newconstructs.com/2011/11/23/predictive-fund-rating-methodology/">here</a>.

	Investors should not buy any Consumer Discretionary ETFs or mutual funds because none get an Attractive-or-better rating. If you must have exposure to this sector, you should buy a basket of Attractive-or-better rated stocks and avoid paying undeserved fund fees. Active management has a <a href="http://blog.newconstructs.com/2012/09/17/less-than-1-of-managers-deliver-alpha-here-are-details/">long history</a> of not paying off.

	Get my ratings on all ETFs and mutual funds in this sector on my free <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm">mutual fund and ETF screener</a>.
<div>

		Figure 1: ETFs with the Best &amp; Worst Ratings
</div>

	<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig11.jpg"><img alt="" class="aligncenter size-full wp-image-4723" height="212" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig11.jpg" title="ConsumerDiscFig1" width="333" /></a>

	* Best ETFs exclude ETFs with TNA&rsquo;s less than $100 million for inadequate liquidity.
<div>

		Sources: New Constructs, LLC and company filings
</div>

	Rydex S&amp;P Equal Weight Consumer Discretionary (NYSE: <a class="ticker" href="/stock/rcd#NYSE">RCD</a>), PowerShares Dynamic Consumer Discretionary (NYSE: <a class="ticker" href="/stock/pez#NYSE">PEZ</a>), and Market Vectors Retail ETF (NYSE: <a class="ticker" href="/stock/rth#NYSE">RTH</a>) are excluded from Figure 1 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.
<div>

		Figure 2: Mutual Funds with the Best &amp; Worst Ratings &ndash; Top 5
</div>

	<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig21.jpg"><img alt="" class="aligncenter size-full wp-image-4722" height="207" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig21.jpg" title="ConsumerDiscFig2" width="369" /></a>

	* Best mutual funds exclude funds with TNA&rsquo;s less than $100 million for inadequate liquidity.
<div>

		Sources: New Constructs, LLC and company filings
</div>

	ICON Funds: ICON Consumer Discretionary Fund (NYSE: ICCCX) and Fidelity Advisor Series VII: Fidelity Advisor Consumer Discretionary Fund (FCNIX) are excluded from Figure 2 because their total net assets (TNA) are below $100 million and do not meet our liquidity standards.

	Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>) is my top-rated Consumer Discretionary ETF and Vanguard World Funds: Vanguard Consumer Discretionary Index Fund (NYSE: <a class="ticker" href="/stock/vcdax#NYSE">VCDAX</a>) is my top-rated Consumer Discretionary mutual fund. Both earn my Neutral rating.

	PowerShares Dynamic Build &amp; Construction (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>) is my worst-rated Consumer Discretionary ETF and Rydex Series Funds: Retailing Fund (RYRTX) is my worst-rated Consumer Discretionary mutual fund. Both earn my Dangerous rating.

	Figure 3 shows that 122 out of the 450 stocks (about 28% of the total net assets) held by Consumer Discretionary ETFs and mutual funds get an Attractive-or-better rating. However, not a single Consumer Discretionary ETF or mutual fund earns an Attractive-or-better rating. The reason is that the majority (about 72%) of assets held by Consumer Discretionary ETFs and mutual funds is allocated to Neutral or Dangerous-rated stocks.

	The takeaways is: mutual fund managers allocate too much capital to low-quality stocks and Consumer Discretionary ETFs hold poor quality stocks.
<div>

		Figure 3: Consumer Discretionary Sector Landscape For ETFs, Mutual Funds &amp; Stocks
</div>
<div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig3.jpg"><img alt="" class="aligncenter size-full wp-image-4718" height="145" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig3.jpg" title="ConsumerDiscFig3" width="423" /></a>

		Sources: New Constructs, LLC and company filings
</div>

	As detailed in &ldquo;<a href="http://blog.newconstructs.com/2012/07/20/low-cost-funds-dupe-investors-2/">Cheap Funds Dupe Investors</a>&rdquo;, the fund industry offers many cheap funds but very few funds with high-quality stocks, or with what I call good <a href="http://blog.newconstructs.com/2011/11/22/portfolio-management-rating-methodology/">portfolio management</a>.

	Investors need to tread carefully when considering Consumer Discretionary ETFs and mutual funds, because not a single one is rated Attractive or better. As you can see in Figure 3, 98% of assets invested in Consumer Discretionary mutual funds are held in Neutral-rated funds, and only 2% are in Dangerous funds. Investors have therefore done well to avoid the worst of the Consumer Discretionary mutual funds. However, even a Neutral-rated fund exposes investors to unattractive stocks, as well as the fees charged by active management. Why pay a manager to select unattractive stocks? Investors should not buy any Consumer Discretionary ETFs or mutual funds and instead should focus on owning a basket of Attractive-or-better-rated stocks.

	Ford Motors (NYSE: <a class="ticker" href="/stock/f#NYSE">F</a>) is a great example of an Attractive-or-better-rated Consumer Discretionary stock.Iit earns my Very Attractive rating. Let&rsquo;s make no mistake about it, the American auto industry went through the ringer during the financial crisis, but Ford was better positioned than its rivals and emerged from the fracas as the clear leader of the American auto pack. Ford is ahead of it peers in increasing operational efficiency, closing outdated factories, and cutting-edge design and engineering. The result is a line of cars and trucks that is not only meeting consumer&rsquo;s demands and generating profits for the company.Ford is now more profitable than ever. During the period 2004-2009, Ford&rsquo;s average <a href="http://www.newconstructs.com/nc/help/glossary.htm#roicDef">return on invested capital</a> was a value-destroying -.85%. In 2010 Ford earned 11.6% ROIC and followed that up with 12.6% in 2011. This is a company that took advantage of a downturn to focus on capital stewardship, efficiency, and profitability. Best of all, the market has not caught on to Ford&rsquo;s new value-generating engine. The current valuation as of 10/10/12, $10.10/share, implies that Ford&rsquo;s profits will permanently decline by 59%. The mismatch between Ford&rsquo;s profitability and growing cash flows and the market&rsquo;s pessimistic valuation earn F a Very Attractive rating.

	Haverty Furniture Companies (NYSE: <a class="ticker" href="/stock/hvt#NYSE">HVT</a>) is one of my least favorite stocks held by Consumer Discretionary ETFs and mutual funds and earns my Very Dangerous rating. Haverty Furniture is not a very profitable company. Their <a href="http://www.newconstructs.com/nc/help/glossary.htm#roicDef">ROIC</a> has not exceeded their <a href="http://www.newconstructs.com/nc/help/glossary.htm#helpWacc">cost of capital</a> in a single year of my model, and has been stuck below 5% since 2005. Those low returns mean that HVT is destroying shareholder value every single year. From 2010 to 2011, HVT&rsquo;s <a href="http://www.newconstructs.com/nc/help/glossary.htm#nopat">NOPAT</a> decreased from $20.0 million to $16.6 million. Some investors may have been fooled by their accounting bottom line, however. HVT&rsquo;s Net Income increased from $8.44 million to $15.46. The reason for their accounting improvement is a non-recurring tax benefit of $14.1 million due to the reversal of the valuation allowance for their Deferred Tax Assets. Investors should not count on seeing a benefit like that again any time soon. The disconnect between HVT&rsquo;s reported Net Income and their true operating profits is one of the reasons the company gets my Very Dangerous rating.

	468 stocks of the 3000+ I cover are classified as Consumer Discretionary stocks, but Consumer Discretionary ETFs and mutual funds hold only 450 stocks.

	Figures 4 and 5 show the rating landscape of all Consumer Discretionary ETFs and mutual funds.

	Our <a href="http://blog.newconstructs.com/2012/10/08/sector-rankings-for-etfs-mutual-funds/">Sector Rankings for ETFs and Mutual Funds</a> report ranks all sectors and highlights those that offer the best investments.
<div>

		Figure 4: Separating the Best ETFs From the Worst ETFs
</div>

	<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig4.jpg"><img alt="" class="aligncenter size-full wp-image-4717" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig4.jpg" title="ConsumerDiscFig4" width="409" /></a>

	Sources: New Constructs, LLC and company filings
<div>

		Figure 5: Separating the Best Mutual Funds From the Worst Mutual Funds
</div>
<div>

		<a href="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig5.jpg"><img alt="" class="aligncenter size-full wp-image-4716" height="245" src="http://blog.newconstructs.com/wp-content/uploads/2012/10/ConsumerDiscFig5.jpg" title="ConsumerDiscFig5" width="409" /></a>

		Sources: New Constructs, LLC and company filings
</div>

	Review my <a href="http://www.newconstructs.com/nc/fundscreener/fund-screener.htm?task=ACTION_CATEGORY_TYPE_SEARCH&amp;selectedTypes=0,1&amp;selectedCategoryIds=5d891c2e114e11e190ae00188b533b34">full list</a> of ratings and rankings along with reports on all 17 ETFs and 27 mutual funds in the Consumer Discretionary sector.

	Disclosure: I own F. I receive no compensation to write about any specific stock, sector or&nbsp;theme.

Broad U.S. Equity ETFs

PowerShares Dynamicnsumer Discretionary Sector Portfolio

Rydex ETF Trust Rydex S&P Equal Weightnsumer Discretionary ETF

Merrill Lynch Retail HOLDRS Trust due 12/31/41

VCDAX

Select Sector SPDR-Consumer Discretionary

Best & Worst ETFs & Mutual Funds: Consumer Discretionary Sector

Perhaps the worst number to come along in the history of exchange-traded products is $100 million. As in $100 million in assets under management means the fund is "good," it will survive and it is now profitable for the issuer. 

The addiction to the $100 million in AUM equals a good ETF theory perhaps stems from a flawed report <a href="http://www.mckinsey.com/App_Media/Reports/Financial_Services/ETF_SecondActFINAL.pdf">from McKinsey</a> that used the number. That report takes a one-size-fits-all approach with the $100 million theory, but the reality is a fund's expense ratio plays a large part in the profitability of an ETF. Multiply an ETF's AUM by its expense ratio and there is an indication of the fund's revenue.

The $100 million in AUM number also does not take into account an ETF manager's ability to make money through securities lending, licensing fees or other external costs related to ETF management. Nor does it consider partnerships such as the one between Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares and Deutsche Bank (NYSE: <a class="ticker" href="/stock/db#NYSE">DB</a>) on ETFs such as the PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

In other words, the $100 million in AUM theory when it comes to ETFs is a lot <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/04/2465525/etf-opinion-the-100m-watermark-is-asinine">of malarkey and that much has been proven</a>. Still, some are attached to the number like they are attached to an old college fraternity sweatshirt wives beg husbands to get rid of. 

Fatal Attachment
References to 1980s movies aside, a fatal attachment might be different than a fatal attraction, but both are fatal. In this case, it is investors' portfolios that suffer on the advice that sub-$100 million ETFs should be shunned like Hester Prynne. 

There are <a href="http://etfdb.com/screener/">14 equity-based ETFs with less than $100 million in AUM that have gained at least 20 percent</a> year-to-date. Some are actually well known given their diminutive status. Others are not as risky as investors might have been lead to believe. 

Even by treating the Market Vectors Egypt ETF (NYSE: <a class="ticker" href="/stock/egpt#NYSE">EGPT</a>) and its almost 61 percent year-to-date pop as an outlier, there are still plenty of noteworthy performances among sub-$100 million AUM funds. Actually, EGPT should not be treated as an outlier because the ETFs has <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/09/2939089/these-etfs-have-topped-techs-big-3">Apple (NASDAQ: </a><a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>), Amazon (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>) and Google (NYSE: <a class="ticker" href="/stock/goog#NYSE">GOOG</a>) this year. Apple is the closest and it still lags EGPT by more than 500 basis points.

Speaking of Egypt, a case can be made that the country's 19.1 percent weight in the Market Vectors Africa ETF (NYSE: <a class="ticker" href="/stock/afk#NYSE">AFK</a>) gain almost 22 percent this year. Naysayers would assert neither AFK nor EGPT are cheap. That would be correct as the funds charge 0.78 percent and 0.94 percent per year, respectively. So the average expense ratio between the two is 0.86 percent, but that comes nowhere close to putting a dent into an average gain north of 40 percent.

The List Goes On
Investing in Africa is an acquired taste. Given elevated political volatility and opaque legal systems, among other concerns, it is understandable that some investors would want to pass on the continent. Still, are plenty of ETFs with less than $100 million in assets that have been on fire this year.

There is the case of the PowerShares Dynamic Building &amp; Construction Portfolio (NYSE: <a class="ticker" href="/stock/pkb#NYSE">PKB</a>). Under normal circumstances, PKB's 31 percent year-to-date gain would be impressive, but its larger rivals, the iShares Dow Jones US Home Construction Index Fund (NYSE: <a class="ticker" href="/stock/itb#NYSE">ITB</a>) and the SPDR S&amp;P Homebuilders ETF (NYSE: <a class="ticker" href="/stock/xhb#NYSE">XHB</a>) are up 63.2 percent and 44.2 percent, respectively. 

While it is understandable that PKB has been overshadowed by its larger rivals, it is odd that with all the praise being heaped on shares of home builders this year, that this $41.5 million ETF does not get much press.

Staying at the sector level, investors that have opted for the giant Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>) have been rewarded with a gain of 18.5 percent this year. They could have done better with the PowerShares Dynamic Leisure and Entertainment Portfolio (NYSE: <a class="ticker" href="/stock/pej#NYSE">PEJ</a>), which is up almost 21 percent.

PEJ, which has $53.1 million in AUM, is another example of some experts creating too much drama around low asset ETFs. The ETF is not home to obscure stocks as Yum! Brands (NYSE: <a class="ticker" href="/stock/yum#NYSE">YUM</a>) and Walt Disney (NYSE: <a class="ticker" href="/stock/dis#NYSE">DIS</a>), among other recognizable names, are found in PEJ's lineup. PEJ's average daily volume of just over 32,000 shares may not sound like much, but most of its underlying components are heavily traded, ensuring sufficient liquidity for the fund.

On a related note, the PowerShares S&amp;P SmallCap Consumer Discretionary Portfolio (NASDAQ: <a class="ticker" href="/stock/pscd#NASDAQ">PSCD</a>), which was designed to be the small-cap rival to XLY, has outperformed its large-cap cousin this year as well. PSCD is up almost 20 percent and has just $61.7 million in AUM.

Heading back overseas, investors need not have taken on excessive risk with sub-$100 million ETFs this year. Indeed, the aforementioned AFK and EGPT do qualify as "risky." There is also a fair number of other emerging markets funds that have surged more than 20 percent this year despite having less than $100 million in assets. 

Investors could have skirted the emerging markets risk by heading to developed Europe. For example, the iShares MSCI Belgium Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ewk#NYSE">EWK</a>) has gained almost 20 percent this year. That move is due in large part to bullishness in Anheuser-Busch InBev (NYSE: <a class="ticker" href="/stock/bud#NYSE">BUD</a>), which accounts for 23.5 percent of EWK's weight. That ETF has less than $29 million in AUM.

Critics would likely assert that risk is elevated with EWK because Belgium is a Eurozone member. Fair enough, but there is an answer. Investors could have avoided that risk and gained better returns by <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2839102/as-europe-etfs-rebound-nordic-plays-flex-their-muscles">turning to Nordic ETFs</a>. The Global X FTSE Nordic Region ETF (NYSE: <a class="ticker" href="/stock/gxf#NYSE">GXF</a>) and the Global X Norway ETF (NYSE: <a class="ticker" href="/stock/norw#NYSE">NORW</a>) are up 20.1 percent and 22.3 percent, respectively, year-to-date.

Given Norway's <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2876423/3-etfs-for-countries-with-solid-gdp-rates">solid GDP growth, a massive sovereign wealth fund</a> and pristine balance sheet, assuming that the biggest risk to NORW is that is has less than $100 million in assets borders on the absurd.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

New ETFs

Emerging Market ETFs

EGPT

iShares MSCI Belgium Ivestable Market Index Fund

NORW

PSCD

Ignoring Sub-$100M ETFs: A Costly Idea

Anatomy Of A Recession Update: What's Different About This Cycle?

REIT Earnings Preview: Delay And Pray

Home Sales Clobbered By Mortgage Rates. New Listings And Active Listings Surge. Most Price Reductions For Any March In Years

A Hawkish Pivot

Behind The Renewed Interest In Lumber Markets

Equities Play A Waiting Game

Why The Market Rally May Still Have Room To Run, Even If Tech Stocks Falter

Biggest Landlords Pile Into 'Build-To-Rent' Single-Family Houses, But Sell Older Houses Into This Overpriced Market

Rise in all-cash transactions helping drive price gains for most expensive U.S. homes

The market has continued to be choppy and confusing, but with the PMO index at the bottom of its range, we need to be watching for signs of the next short-term uptrend.