Market Overview

China, Materials And Semiconductor ETFs To Watch This Week

China, Materials And Semiconductor ETFs To Watch This Week

After a short-term period of consolidation, the SPDR S&P 500 ETF (NYSE: SPY) jumped 1 percent higher to end last week.

This strength was driven by confirmation of additional stimulus from central banks in Europe and China, along with better than expected U.S. economic data.

The week ahead features a holiday shortened session with the markets closed on Thursday for Thanksgiving. They will resume for a half day on the notorious black Friday shopping extravaganza.

Here are the key ETFs to watch for the week of Monday, November 24:

iShares China Large-Cap ETF (NYSE: FXI)

Chinese stocks received a boost last week when its central bank opted to reduce the benchmark interest rate for the first time since July 2012. This unexpected maneuver is intended to stimulate economic growth and boosted FXI nearly 4 percent higher on Friday.  

Related Link: Keep Warm This Thanksgiving With This Natural Gas ETF

FXI is the largest China-focused ETF that tracks 56 underlying large-cap stocks and quasi-government agencies. FXI is sitting on a modest 4 percent gain this year that has the potential to extend higher if these stimulus measures are well received by international investors.

Materials Select Sector SPDR (NYSE: XLB)

The materials sector was hard hit in October as commodities fell to their lowest levels of the year. XLB follows 32 large-cap stocks engaged in chemicals metals and packaging. Dow Chemical Co (NYSE: DOW) and Monsanto Company (NYSE: MON) are two of the top five holdings in this benchmark sector ETF.

XLB has rebounded significantly from its October sell-off and is now retesting its prior 2014 high. Traders will be watching this ETF closely for a confirmed breakout behind strong momentum that has the potential to pull the rest of the market along with it.

iShares PHLX Semiconductor ETF (NASDAQ: SOXX)

Semiconductor stocks received a boost last week when industry titan Intel Corporation (NASDAQ: INTC) announced an increase in its already hefty dividend payment. SOXX tracks 31 companies in the semiconductor sector and hit a new 52-week high on Friday.

This ETF has gained 25 percent since the beginning of the year, making it one of the brightest technology groups to date in 2014. A continuation of this uptrend will be a positive sign for the broader sector benchmark Technology Select Sector SPDR as well.


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