5 ETFs to Watch This Week
01/17/12 - 06:00 AM EST
NEW YORK (TheStreet
) -- Here are five ETFs to watch this week.
Financial Select Sector SPDR (XLF)
On Friday, JPMorgan (JPM)
kicked off the financial earnings season on a shaky note, missing analyst expectations. The company's investment banking branch was fingered as a major culprit leading to this disappointment.
Now that JPM's weak showing has lowered the bar a bit, it will be interesting to see how fellow Wall Street kings fare in the days ahead. Goldman Sachs (GS)
, Bank of America (BAC)
, Citigroup (C)
and Wells Fargo (WFC)
are scheduled to report this week.
The quintet help make up nearly one-third of XLF's portfolio. In addition to the direct impact earnings will have on the fund's performance however, the showings will help shed light on how the broader financial sector has fared during the past three months.
iShares Dow Jones U.S. Technology Sector Index Fund (IYW)
Whereas financial bigwigs are spread throughout this week's earnings calendar, for technology enthusiasts, Thursday will be the day to watch. With household names like IBM (IBM)
, Intel (INTC)
, Google (GOOG)
and Microsoft (MSFT)
on the docket, investors will gain insights into the state of industries in technology.
It is possible for investors to use concentrated ETFs to target thier favorite industries on an individual basis. However, those looking to cast a wide should keep an eye on broad based funds like IYW, Technology Select Sector SPDR (XLK)
and PowerShares QQQ (QQQ)
SPDR S&P Homebuilders ETF (XHB)
As the U.S. marketplace continues to enjoy strength, increasingly confident investors are showing a willingness to take on risk. This has boded well for troubled sectors like homebuilders. Since kicking off the New Year on a positive note, XHB and the iShares Dow Jones U.S. Home Construction Index Fund (ITB)
have seen only limited losses, both having managed to regain levels last seen in June.
While encouraging, I continue to urge investors to tread carefully here. The economic calendar for the week ahead is ridded with real estate related reports, including housing starts and existing home sales. Any sign of weakness will likely create turmoil for this fast-moving duo.
United States Natural Gas Fund (UNG)
After spending the first week of 2012 trading sideways, natural gas futures-tracking products like UNG and iPath Dow Jones UBS Natural Gas Subindex Total Return ETN (GAZ)
appear to have started another leg lower. Thanks to five consecutive days of losses, both products have secured brand new all time lows.
At this time, the closely watched fuel is battling against storms on all sides. Warm weather is constricting demand while, at the same time, industry specialists note that inventories are brimming. Winter weather may help limit this price drop. However, UNG and GAZ should continue to be monitored from the sidelines.
Guggenheim Solar ETF (TAN)
The solar sector spent the great portion of 2011 trading lower as persistent macroeconomic concerns weighed heavily on investor confidence in alternative energy. While many of these daunting factors remain in play, the clouds appear to have begun to lift. Over the past week, both TAN and the Market Vectors Solar Energy ETF (KWT)
(KWT) saw a dramatic about-face.
A single week of strength is not enough to confidently state that the fog has lifted on this industry. However, given the magnitude of this run up, TAN and KWT are certainly worth watching in the days ahead.
Written by Don Dion in Williamstown, Mass.