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Five ETFs to Watch This Week

Corporate earnings will play a role in steel, retail and agribusiness ETFs.
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NEW YORK (TheStreet) -- Earnings will play an important role this week for retail, steel and agribusiness ETFs.

SPDR S&P Retail ETF (XRT) - Get SPDR S&P Retail ETF Report

Bed, Bath & Beyond

(BBBY) - Get Bed Bath & Beyond Inc. Report

,

Family Dollar

(FDO)

,

Pier 1

(PIR) - Get n.a. Report

and

Pep Boys

(PBY) - Get Prospect Capital Corporation 6.25 % Notes 2018-15.06.28 Report

report this week.

Although XRT holds only a 1.6% position in FDO, it is the best fund to play the broader retail sector.

PowerShares Dynamic Retail

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TheStreet Recommends

(PMR) - Get Invesco Dynamic Retail ETF Report

has the most direct exposure to the above firms, with 4.9% in BBBY and 2.6% in PIR.

XRT was one of

the best performing ETFs in the first quarter

, and investors will closely watch earnings to see if that the trend has legs.

Market Vectors Agribusiness ETF

(MOO) - Get VanEck Agribusiness ETF Report

Widely followed

Monsanto

(MON)

reports earnings on Wednesday before the bell. Analysts expect $1.73 in earnings per share for the quarter ended February.

The analysts were looking for earnings of $1.99 per share as recently as two months ago, but estimates have been falling. Meanwhile, earnings for the next quarter, ending in May, have trended higher, from $1.36 to $1.56.

Monsanto has been an underperformer this year, down 12.3% in the first quarter, and the slide has been pretty much uninterrupted. MON, which accounts for 7.9% of MOO's assets, has been part of the reason why the fund has lagged the

S&P 500

this year.

Market Vectors Steel ETF

(SLX) - Get VanEck Steel ETF Report

Last week, the big three iron-ore producers,

Rio Tinto

(RTP) - Get Reinvent Technology Partners Class A Report

,

BHP Billiton

(BHP) - Get BHP Group Ltd. Report

and

Vale

(VALE) - Get Vale SA Report

, gained a pricing advantage when BHP said it would be selling iron at spot prices on a quarterly basis.

The three firms, which are responsible for three-quarters of global output of iron ore, typically end up using similar contracts as both buyers and sellers work through the annual negotiating process. This pricing model favors the miners in a rising price environment.

Twenty-four percent of SLX's assets are in VALE and RTP, with the holdings split evenly between the two firms. The two's strong performance last week helped lift SLX. This week, Korean steelmaker

Posco

(PKX) - Get POSCO Report

, the fourth largest holding with almost 6% of the assets, reports earnings.

iShares: MSCI South Korea

(EWY) - Get iShares MSCI South Korea ETF Report

Posco

(PKS)

, the second largest holding in EWY, accounting 7.6% of its assets, is scheduled to report earnings Thursday.

The firm was in the news last week when coal miner

Peabody

(BTU) - Get Peabody Energy Corporation Report

had its buyout offer rejected by Macarthur of Australia. Posco is one of the largest shareholders in Macarthur, along with fellow steelmaker

Arcelor Mittal

(MT) - Get ArcelorMittal SA Report

and Chinese state-owned CITIC Resources.

CurrencyShares Japanese Yen Trust

(FXY) - Get Invesco Currencyshares Japanese Yen Trust Report

Usually the euro ETF makes the list due to ongoing sovereign debt concerns in Europe, but last week's drop in the yen followed a steep decline the week before. FXY is down about 4% in the past two weeks.

The decline in the yen has implications for

PowerShares DB U.S. Dollar Index Bullish Fund

(UUP) - Get Invesco DB US Dollar Index Bullish Fund Report

and Japan ETFs such as

iShares MSCI Japan

(EWJ) - Get iShares MSCI Japan ETF Report

. For UUP, much of its strength in the first quarter was due to euro weakness. If the yen continues to weaken versus the U.S. dollar, an even stronger rally could be developing.

For EWJ, the declining yen will be a headwind for foreign investors holding yen denominated assets. This is fortuitous for WisdomTree, however, because the firm

added a currency-hedge to its Japan ETF

,

WisdomTree Japan Total Dividend

(DXJ) - Get WisdomTree Japan Hedged Equity Fund Report

, on April 1.

-- Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion was long DB U.S. Dollar Index Bullish Fund and Market Vectors Agribusiness ETF.

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.