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3 ETFs To Watch This Week: China, Casinos And More

February 18, 2020 10:45 am
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3 ETFs To Watch This Week: China, Casinos And More

U.S. markets were closed Monday, but there were some headlines out on the holiday that could prove relevant for several exchange traded funds over the course of this week.

To be sure, some of the ETFs likely to be in the spotlight this week don't often spend much time with that status and some have distinctly international feels.

Without further, here are three ETFs that are worth keeping a close eye on this week.

VanEck Vectors Gaming ETF (BJK)

Considering it's the only ETF dedicated to casino operators and related companies, the VanEck Vectors Gaming ETF (NYSE:BJK) generally doesn't garner much attention. It recently has, however, due in large part to Macau announcing forced closures of its casinos due to the new coronavirus from China.

Even with that immense challenge, BJK jumped 3.24% last week. Good news arrived Monday as authorities on the peninsula said they will abide by the initial 15-day closure plan and allow gaming venues to reopen this Friday. That's certainly a step in the right direction, particularly because some high-ranking industry executives recently expressed concern that the closure scheme could last longer than initially anticipated.

More near-term help for BJK could be realized – though are no guarantees on this – if China relaxes strict travel bans to Macau that were implemented as a result of the virus.

See Also: Modern Travel Arrives In This New ETF

iShares MSCI South Africa ETF (EZA)

The iShares MSCI South Africa ETF (NYSE:EZA) gained nearly 2% last week, but the fund remains lower by 4.71% to start 2020. That's more than triple the loss of the China-heavy MSCI Emerging Markets Index.

EZA could be challenged this week because Moody's Investors Service lowered its forecast for South African economic growth on Monday. That's relevant because the ratings agency will review South Africa's Baa3 credit rating next month and plenty of market participants are bracing for a downgrade.

Adding to the potential near-term strain on EZA would be any news out of China that auto sales are weakening due to the coronavirus. That would punish high-flying palladium, the commodity that South Africa's is the world's number two producer of.

Technology Select Sector SPDR (XLK)

The Technology Select Sector SPDR (NYSE:XLK) is obviously the marquee ETF highlighted here and it makes for a predictable beneficiary of good news out of China.

An interesting tidbit pertaining to XLK emerged in a recent Barron's article that notes some fund managers – if you can believe – it are under-allocated to Apple (NASDAQ:AAPL), Intel (NASDAQ:INTC) and Microsoft (NASDAQ:MSFT).

That trio of tech titans combines for over 44% of XLK's weight.


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