Markets got off to a strong start last week as bargain shoppers finally stepped in after a long stretch of profit-taking pressures on Wall Street. Investors rejoiced over renewed optimism that a deal in Congress would be reached before the much-feared “fiscal cliff,” but pessimism crept back onto the stock front after Chairman Bernanke commented that the Fed doesn’t have the necessary tools to shield the economy from the potential harm that could arise from the automatic rounds of spending cuts and tax hits that could come January 1. Encouraging economic data on the housing front did, however, boost investor confidence, though disappointing earnings results from Best Buy and Deere weighed heavily on the markets. This week, investors will once again see a number of economic reports from around the world. Below, we outline three ETFs that should see a fair amount of activity during the week ahead [see also 7 Simple & Cheap ETF Model Portfolio]:
1.Industrial Select Sector SPDR Fund (XLI)
Why XLI Will Be in Focus: This fund is one of the most popular on the market, with over $3.2 billion in assets and an average daily volume just over 11 million. XLI seeks to replicate the performance of the U.S. industrial sector and will be in focus this week as U.S. durable goods for the month of October are slated to come out on Tuesday. In the previous report, demand for durable goods bucked analyst’s expectations, rising 9.9% in September. For the month of October, however, analysts are expecting a significant slowdown, with orders coming in around 0.4% [see also 17 ETFs For Day Traders].
2.MSCI Switzerland Index Fund (EWL)
Why EWL Will Be In Focus: This fund is designed to measure the performance of the Swiss equity market and is home to over $650 million in total assets. Top holdings of EWL include big names like Nestle and UBS, though the fund has a tilt towards the healthcare sector. EWL will come into focus on Thursday as Switzerland’s GDP is released. The country’s economic growth unexpectedly slipped 0.1% in Q2, following two quarters of GDP expansion. Should GDP results disappoint once again, EWL may take a hit, but a surprise could make for a lucrative session for this fund.
3. Consumer Discretionary Select SPDR (XLY)
Why XLY Will Be In Focus: This ETF is by far the largest and most popular consumer discretionary fund on the market, with total assets topping $3.4 billion and an average daily trading volume of 4.8 million. Its focus will come later in the week, as U.S. third quarter GDP and U.S. consumer spending data are slated to be reported on Thursday and Friday, respectively. Analysts are expecting an uptick in economic growth to 2.9% from the previous 2.0% rate, while consumer spending is expected to come in flat after a slight increase in the previous report [see also How To Pick The Right ETF Every Time].
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Disclosure: No positions at time of writing.