Three ETFs To Watch This Week: QQQQ, IAI, QCLN

by on January 17, 2011 | ETFs Mentioned:

Equities across the globe rose higher for the most part last week, with Portugal’s bond sale easing debt worries, and upbeat earnings reports sending the S&P 500 to new multi-month highs. Meanwhile, gold took a tumble as the conservative safe-haven lost its luster despite continued weakness in the dollar. Treasurys marched upwards on Friday, after the latest December CPI data showed a 0.50% rise in consumer prices, leading many to believe that inflation would not appear for quite some time.

This week, investors will have an onslaught of economic news to sort through, as financial and technology giants are slated to release earnings for their most recent fiscal quarters. On top of that, housing market statistics, the Philadelphia Fed Survey, and jobless claims are also hitting the street in this holiday-shortened week as all domestic markets are closed today in observance of Martin Luther King Jr. Day. Below, we profile three funds that could be in for an active week given the multitude of important events hitting the markets over the next several days:

PowerShares QQQ Trust (QQQQ)

Why QQQQ Will Be In Focus: This extremely liquid and popular fund includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. With industry leader Apple (AAPL) reporting earnings this week, QQQQ will come into focus for traders and investors alike. Apple, which accounts for about 20% of QQQQ’s holdings, is reporting quarterly results on Tuesday, January 18, after the market close. Analyst consensus is for the company to haul in $24.19 billion in revenue, and earn $5.31 per share. Apple’s partnership with Verizon is a positive catalyst going forward for the tech-giant, and Goldman Sachs recently increased their earnings estimates for the bellwether, while also giving the tech company a “buy” rating for with a $430 price target [see Apple & Verizon Team Up On iPhone: How Will ETFs Respond?]. Considering that QQQQ provides exposure to the Nasdaq, its no surprise the fund has posted very respectable returns, yielding over 4% year to date, and just over 22% in the past 52-weeks [see QQQQ Fundamentals]. However, if these solid returns are to continue into the future, investors will need to see a robust report from the California-based technology giant.

iShares Dow Jones U.S. Broker-Dealers Index Fund (IAI)

Why IAI Will Be In Focus: This fund will come into focus as a round of financial-service leaders report quarterly earnings and offer commentary on the recovery of the financial sector as a whole. IAI tracks the Dow Jones U.S. Select Investment Services Index, which measures the performance of the investment services sector of the U.S. equity market. Goldman Sachs (GS), which accounts for 8.4% of IAI’s assets, is reporting results on Wednesday before the market open, and analyst consensus is for the financial behemoth to earn $3.89 a share, a decrease from 2009′s comparable earnings of $8.20 a share. Morgan Stanley (MS), which comes in as the fund’s second highest holding after Goldman at 7.3%, reports quarterly results on Thursday before the bell [see IAI Holdings]. Analyst consensus is for the firm to earn 36 cents a share, on $7.4 billion in revenue. Both companies, but especially Goldman Sachs, are expected to post weaker quarterly results this time around as trading volumes have slumped and as a result, trading profits are expected to decrease from last year’s high levels.

First Trust NASDAQ Clean Edge Green Energy Fund (QCLN)

Why QCLN Will Be In Focus: This clean energy fund will make its way across investor’s radar screens this week as the top two holdings of its portfolio are reporting earnings after the market closes on Tuesday. Cree Inc. (CREE), which represents around 8.2% of QCLN’s total holdings, is expected to generate $276.6 million in revenues, and post profits of $0.58 a share [see QCLN Holdings]. Cree is a leading manufacturer of numerous LED products, as well as semiconductor components for wireless communication devices. Linear Tech (LLTC), which designs and sells integrated circuit products, is expected to post profits of $0.58 a share, and revenues totaling $378.76 million. QCLN has been returning investors hefty gains recently, yielding just over 17% in the past 26-weeks [see QCLN Fundamentals]. Investors will surely keep an eye on this hot green-energy fund this week, as its top two holdings report quarterly earnings results and offer commentary for the clean-energy sector going forward. [For more trading and investing ideas consider using the free stock exposure tool,  and search for ETFs that offer the specific equity exposure that you desire.]

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Disclosure: No positions at time of writing.