Three ETFs To Watch This Week: EWY, PALL, VXX

by on March 29, 2010 | ETFs Mentioned:

With the end of the first quarter coming to a close, many equity markets continued their slow but steady climb higher last week, with some even touching new 18 month highs. The week ahead will bring a slew of data releases and earnings reports that should test the strength of the current rally. Below, we profile three ETFs in particular that could see an active week:

iShares MSCI South Korea Index Fund (EWY)

Why EWY Could Be On The Move: After an explosion caused a South Korean naval ship to sink late last week, speculation over the cause of the blast immediately began, with some TV stations wondering if North Korea was involved in some way. Because the explosion occurred after South Korean equity markets had already closed, EWY slumped on Friday despite a strong day for stocks in Seoul. As a result, EWY finished Friday at a whopping 1.6% discount to NAV.

As a result, EWY should be very active in early Monday trading, as investors and arbitrageurs pile in to whittle away and gaps to NAV. Moreover, the circumstances surrounding the sinking of the ship remain murky. If there is any further escalation of tensions between the countries, EWY could be back in the spotlight.

ETFS Physical Palladium Shares (PALL)

Why PALL Could Be On The Move: The first day of every month brings highly-anticipated reports from automakers on sales for the previous month. Momentum has been building in this sector in previous months, as an industry once left for dead has shows signs of life. Catalytic converters account for a significant portion of demand for palladium, so this precious metal depends heavily on the health of the auto industry. PALL should be very active on Thursday as manufacturers begin releasing March numbers.

iPath S&P 50 VIX Short Term Futures ETN (VXX)

Why VXX Could Be On The Move: This week is full of earnings reports and data bulletins, but the most important and highly-anticipated release will come on Friday morning. The monthly unemployment report has become one of the most important economic indicators in recent months, as investors anxiously await some indication that job creation is underway. If the number released Friday is significantly different than the market’s expectation of 9.7% unemployment, volatility ETNs could be on the move (see Three ETFs That Could Be Crippled By Contango).

Last Week’s ETFs To Watch

The three ETFs profiled last week as potential big movers all experienced relatively active weeks:

Emerging Markets Financial Titans Index Fund (EFN): This ETF finished the week up about 1% after earnings reports from Chinese banks were largely in line with expectations.

iShares Dow Jones U.S. Home Construction Index Fund (ITB): This ETF finished the week nearly 3% higher, as impressive reports for new and existing home sales boosted the homebuilding sector.

iShares Dow Jones U.S. Healthcare Providers Index Fund (IHF): This ETF went on a wild ride last week, jumping nearly 1% on Monday before sliding steadily throughout the rest of the week. IHF finished the week down 1.5%.

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Disclosure: No positions at time of writing.