Dion's Weekly ETF Winners and Losers

Investors push up the value of hard assets and materials producers, as unemployment hits 10%.
Author:
Publish date:

NEW YORK (TheStreet) -- The stock market rebounded off its dismal end-of-October showing, with the S&P 500 and the Dow Jones Industrial Average each up 3.2% for the week. Unemployment climbed above 10%, as monthly jobless claims improved slightly. Even if job losses come to a standstill, job creation is needed to reduce unemployment, but so far the employment picture remains one of the worst parts of the economic landscape.

Investors pushed up the value of hard assets and materials producers, however, as optimism prevailed. Warren Buffett's "all-in" bet on the U.S. -- his purchase of

Burlington Northern Santa Fe

(BNI)

railroad -- helped lift the market, with the Dow Jones Transportation Index up 6.6% for the week and the ETF of that index,

iShares Dow Jones U.S. Transportation

(IYT) - Get Report

, up 6.5%.

Here are the week's winners and losers.

Winners

Market Vectors Gold Miners ETF

(GDX) - Get Report

+12.4%

PowerShares DB Silver Fund

(DBS) - Get Report

+6.3%

iShares Silver Trust

(SLV) - Get Report

+6.3%

This week saw a strong showing from precious metals. Silver and gold ETFs surged as fears of inflation and volatility caused investors to move toward safer holdings. Fear of continued dollar weakness also helped gold prices hit record highs above $1,100 per ounce. On this news, gold miner ETFs rallied to the top of our list.

Market Vectors Coal ETF

(KOL) - Get Report

+8.1%

Market Vectors Steel ETF

(SLX) - Get Report

+7.3%

The coal and steel ETFs were other big gainers this week. Positive performance from these sectors is a strong signal that the economic crisis is continuing to heal. While oversupply continues to pain Chinese steel makers, others nations' industries are seeing a lift.

> > Bull or Bear? Vote in Our Poll

Buffett's purchase of Burlington Northern Santa Fe likely helped boost the coal ETFs this week. Although some feel that the purchase is expected to weigh on

Berkshire Hathaway's

(BRK.A) - Get Report

credit ratings, the move is a strong sign that Buffett is bullish on coal's future.

Market Vectors Brazil Small Cap

(BRF) - Get Report

+9.2%

iShares MSCI Brazil Index Fund

(EWZ) - Get Report

+8.1%

iShares S&P Latin America 40 Index Fund

(ILF) - Get Report

+7.3%

SPDR S&P Emerging Latin America ETF

(GML)

+6.3%

Strength in Brazil's markets lifted ETFs designed to track Latin American nations. While the introduction of a new trading tax depressed Brazilian ETFs last week, investors have since returned to the instruments heavily weighted in this nation, sending it to the top of our winners list. Brazil's markets benefited from positive earnings reports and increased strength in the Brazilian real.

Losers

ProShares Ultra Short China

(FXP) - Get Report

-11.5%

The double inverse China fund is my big loser this week as the Chinese ETFs reacted to increased GDP estimates and better earnings.

Claymore/AlphaShares China Small Cap

(HAO) - Get Report

gained 6.4%, and

iShares FTSE/Xinhua China 25

(FXI) - Get Report

added 5.9%.

Growing trade tensions didn't affect stock prices this week, but the escalating situation could eventually lead to very damaging results. The U.S. placed a tariff that averages 36.5%, on top of a tariff of 21% imposed in September, on $3.2 billion worth of steel pipe exports from China. The U.S. will also start an investigation that could lead to more tariffs. China responded with an investigation into America autos.

iPath Natural Gas

(GAZ) - Get Report

-5.6%

U.S. Natural Gas

(UNG) - Get Report

-7.2%

In the week before last, the Energy Information Administration reported that "working gas stocks in the West region exceeded the regional demonstrated peak capacity," but the region managed to squeeze in another 1 billion cubic feet in the past week. Across the country, storage was up 29 Bcf, setting record highs in every region and for the nation.

The weather isn't cooperating either. EIA reports that "the average temperature for the week was 55.9 degrees, which is close to 2.9 degrees above normal and 4.3 degrees above last year's temperature."

iShares Barclays 20+ Year Treasury

(TLT) - Get Report

-2.2%

SPDR Long Term Treasury

(TLO)

-2.7%

It was an up week for the market, and one side effect was a selloff in long-dated Treasury bonds. On Oct. 7, the yield on the 30-year Treasury was 4%, but it closed above 4.4% this week. TLT lost 5.6% over that period, while TLO fell 5%.

There's pressure on these bonds from investors who fear inflation and from those who believe the demand is insufficient to absorb the amount of debt being issued by the federal government. As we learned this week, while fixed-income ETFs were a very popular destination in October,

most of the money

went into inflation-protected bonds and short-term Treasuries.

-- Written by Don Dion in Williamstown, Mass.

A special note from Don: To put it simply, I want to help you profit from ETFs. You don't have to be an expert trader -- there are potential profits for investors at every level. And I think there's no better way to jump into the world of ETFs than my brand new service, TheStreet ETF Action by Don Dion. Membership is limited, so click here to get in on the action!

At the time of publication, Dion was long TLT, EWZ and GDX.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.