Equity markets kept winning streaks going last week, as the S&P 500 jumped more than 2% on positive earnings reports and better-than-expected sales on new homes. Rising oil prices–crude inched higher to finish the week above the $85–gave the energy sector a boost. With even more earnings reports ahead, U.S. markets figure to be active again in the coming days. In Europe, clouds are beginning to disappear–both figuratively and literally. The ash from the Icelandic volcano appears to be subsiding while the uncertainty in Greece appears to be nearing an end after the country said it would tap a rescue program from the other euro zone members as well as an aid package from the IMF. Below, we profile three ETFs in particular that could see an active week:
Market Vectors TR Gold Miners (GDX)
Why GDX Could Be On The Move: Before the market opens on Wednesday, the largest component of GDX, Barrick Gold, will give its quarterly earnings report. Barrick Gold, with a market capitalization of almost $40 billion, is one of the largest gold miners in the world and is often seen as a bellwether for the industry. Barrick makes up close to 16% of GDX’s holdings. The company is expected to earn sixty cents for the first quarter of 2010 (see What Every Investor Needs To Know About Commodity ETF Investing for a look at how investors use ETFs like GDX to bet on commodity prices).
Claymore/MAC Global Solar Energy Index ETF (TAN)
Why TAN Could Be On The Move: After the market closes on Wednesday, the largest component of TAN, First Solar, will report its quarterly earnings. The company is expected to post earnings of $1.66 for the quarter after significantly beating estimates in the previous quarter. First Solar makes up about 11% of TAN’s holdings, which are spread out among 31 other securities. Look for a good earnings report out of TAN to help boost the as-of-late struggling solar energy sector. However if First Solar misses estimates, it could set the tone for the rest of the alternative energy market for the foreseeable future. For more information on alternative energy plays, see this Definitive Guide To Clean Energy ETFs.
iShares MSCI Austria Index Fund (EWO)
Why EWO Could Be On The Move: The title of President in Austria is a largely symbolic position in the small, wealthy, landlocked nation in Central Europe. Still Austrian equity markets will be in focus as the country chooses a leader for a new six year term. The current President, Heinz Fischer is widely expected to win a second term in a landslide, possibly garnering as much as 80% of the vote. However, it will be interesting to see how well the far-right candidate, Barbara Rosenkranz does in the election. If she is able to garner a decent amount of support, it could signal a continued rise of far right parties in Europe and put markets in focus accordingly(see Is the Austria ETF In Trouble?)
XLF: This financials fund had a rocky week, as good earnings from Citi and Goldman were overshadowed by continued speculation over the extent and depth of the Goldman Sachs fraud case and a regulatory overhaul. Nevertheless, XLF finished the week higher by more than 3%.
XHB: Homebuilders soared late last week after a huge increase in new home sales was reported. This increase, which was the biggest in almost 40 years, sent homebuilders higher by close to 2% on the day; for the week XHB was up more than 10%.
FXC: Although flat for much of the week, FXC spiked higher in Tuesday trading by close to 1.4%. Although the Bank of Canada left rates unchanged at 0.25%, it signaled that it was likely to be the first of the G-7 to raise rates, news that pushed the ‘loonie’ and FXC higher on the week.
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Disclosure: no positions at time of writing.