Last week was turbulent one for equities as the Greek debt situation dominated headlines. The week opened up on a dismal note as the news came that a Greek referendum was in place in regards to the planned bailout package. Equities tanked for the following two days, only to recover on the Fed’s comments, or lack thereof mid-way through the week. Ben Bernanke addressed the nation on Wednesday and made no further mention on QE, prompting a massive buy as investors felt that the Fed was finally comfortable with how the economy was behaving. Thursday prompted another strong day as Greece nixed the referendum and accepted the bailout package that was originally planned. Now that the European turmoil is out of the limelight, at least for the time being, all eyes will turn to the U.S. economy, and our looming budget deficit that is far from solved [see also ETF Insider: Greek Drama Steals Spotlight].
This coming week sees us exit the third quarter earnings season, which saw a number of strong reports by bellwether firms. But while major earnings are slowing down, global economic data is still constantly rolling in. Below, we outline three ETFs to keep a close eye on as the week progresses.
MSCI Australia Index Fund (EWA)
Why EWA Will Be In Focus: This ETF measures the performance of Australia’s equity market and has been around since 1996. Top holdings in the fund include the massive miner BHP Billiton as well as a number of big banks down under. EWA has lost about 5.6% on the year, though its dividend yield of 4.6% has helped to ease that figure. This ETF will be a good one to watch as this week given that Australia will release their unemployment figures on Wednesday; and the numbers aren’t looking good. The nation added just over 20,000 jobs last month, but is predicted to only add 10,000 for October, effectively increasing the unemployment rate. If these figures come in as expected, look for EWA to slump late in the week [see also PIMCO Launches Aussie Bond ETF].
S&P North American Technology-Multimedia Networking Index Fund (IGN)
Why IGN Will Be In Focus: IGN is designed to track the performance of U.S.-traded multimedia networking stocks. The fund’s top holding comes from Cisco, which is the very reason why it will be a good ETF to watch on the week. Cisco, which accounts for nearly 11.6% of the fund, will be reporting their earnings on Wednesday and as most investors are aware, that can be a dangerous event. After an earnings debacle several quarters ago, Cisco’s share price has been beaten down and has had trouble recovering. Though the firm recently began paying out a dividend, the future of the company still remains in question. Analysts are predicting an EPS of $0.39 with revenues eclipsing the $11 billion mark. If Cisco can meet its marks, look for IGN to perform favorably, but another tragic miss by this networking giant could send this ETF spiraling [see also 25 Things Every Financial Advisor Should Know About ETFs].
United States Natural Gas Fund LP (UNG)
Why UNG Will Be In Focus: Natural gas has been in for a rough 2011, as UNG has been stuck in a range-bound downward trend for several months while investors have grown frustrated trying to predict the fossil fuel’s future. But after a recent deal by a Texas-based firm was signed to export a significant amount of LNG to the U.K., UNG has seen a little skip in its step. The fund will be a good option for traders to watch on the week given its volatility as well as the buzz surrounding the underlying commodity. Also bear in mind that the EIA weekly natural gas supply report is released every Thursday and tends to be a big mover for the fund [see also Commodity Trading Trends: Natural Gas In Focus].
Disclosure: Long CSCO. No positions at time of writing.