Three ETFs To Watch This Week: SPY, VGK, VXX

by on August 22, 2011 | ETFs Mentioned:

This past week was yet another unstable mixture of foggy outlooks and volatile equities, pushing double dip fears into the spotlight. Though the beginning of the week saw a nice rebound in equities, a number of analysts are wary a dead cat bounce, a pattern where equities enjoy slight rebounds as they consistently trend downwards. Looking forward to this week, a number of major economies will be in focus. Now that earnings season has just about wrapped up, a number of important economic indicators will be in the spotlight, as a number of developed economies outline key economic statistics. Below, we outline three ETFs for investors to keep a watchful eye on as the week plays out:

SPDR S&P 500 (SPY)

Why SPY Will Be In Focus: The past week saw several strong and weak market days, wreaking havoc on the king of ETFs. And with this week chalk full of important data, SPY will be a fund that demands daily if not hourly monitoring. First, a durable goods figure will comment on our consumer segment, a key figure for economic recovery. Late in the week, the all-important U.S. GDP figure will be revealed along with a speech from Ben Bernanke. The speech alone is worrisome, as Bernanke seems to have a negative affect on markets. Bear in mind that our last GDP came in positive, but it takes just two negative reports in a row to define a recession, putting this report into the limelight [see also Here’s A Wild Idea: The ETF ETF].

European ETF (VGK)

Why VGK Will Be In Focus: As the Euro-zone continues to exhibit instability, this ETF has been put under significant pressure, already losing 11% on the year. VGK makes its biggest country allocations to the U.K., France, and Germany, while representing big names firms like Nestle and Vodafone. Unfortunately, the high allocations to France and Germany have put a damper on this fund, as many fear the fiscal health of the French. Also, Germany experienced a slower-than-expected GDP growth for its most recent quarter, crushing investor confidence as Europe’s bellwether economy seems to have hit a bump in the road. Along with a GDP report from England, Germany will also release an important economic survey this week, which could cause some significant swings in VGK [see also Three ETFs To Watch If Roubini Is Right About Europe].

S&P 500 VIX Short-Term Futures ETN (VXX)

Why VXX Will Be In Focus: As the benchmark volatility ETP, VXX has been under the microscope in the past two weeks, as volatile markets have led to impressive gains for this fund. While the VIX is surging to highs not seen since the 2008 crash, VXX is enjoying double digit gains on certain days, as investors use this trading instrument to find strong returns in sessions where equities are down. With a number of key economic indicators being released this coming week, VXX will be important to watch as any kind of good news will sink this fund, while any bad news will likely send its share price through the roof [see also Six ETFs Up 45% Or More During The Recent Crisis].

Disclosure: No positions at time of writing.