Talks of the American Economies Fiscal Cliff cast a shadow over the economy as stocks consistently dropped throughout the week. Law makers announced Friday that there has been progress in budget talks with the White House, leading a mini market rally to end the week on a better than expected note. Not everyone enjoyed the Friday rally, as Twinkie maker Hostess announced it would be liquidating the business and laying off 18,000 employees. UBS announced earlier this week that it would be cutting 10,000 jobs in its fixed income, currency, and commodity unit, leading many investors to abandon the Swiss bank and the stock price to sink. Japan has started its election process, with voting taking place a month from now the Liberal Democratic Party is hoping to displace the Democratic Party of Japan after numerous scandals and tax increases [also see Least Correlated Country ETFs to S&P 500].
RBS finally launched its Jim Rogers ETNs this week after delaying due to Hurricane Sandy. With different commodity focuses, these products include a broad-based ETN (RGRC), as well as resource specific notes linked to certain types of natural resources including agriculture (RGRA), energy (RGRE), precious metals (RGRP), and industrial metals (RGRI).
Below we outline the three best stories from around the ETF space this past week:
1. MLPs Are Getting Crushed at Commodity HQ:
The reelection of Barrack Obama has been kind to industries like healthcare and homebuilding, but at the same time detrimental for MLPs. The on coming threat of a fiscal cliff has caused this sector to spiral out of control, and will probably remain that way until January when the Bush tax cuts end. Jared Cummans outlines which ETFs have been hardest hit since election day, and how investors might play this situation.
2. High-Yield Bond ETFs Getting Junkier? at ETF Trends:
Junk bonds have attracted investors with high yields for years, especially when more traditional investment options are yielding record lows. But now more than ever, the outcome of high yield bonds is being obscured by politics and the uncertainty of how Congress will process with its tax decision, while the general market is looking brighter. Tom Lydon discusses what investors should consider before buying into junk bonds [see also Free 7 Simple & Cheap All-ETF Portfolios].
3. ETF Picks For 3 Of America’s Best Small Companies at ETF Database:
Small businesses were some of the hardest hit in the recent recession, but as times begin to turn around these companies can offer exposure to niche markets and high growth potential. Forbes profiled some of Americas most successful small businesses that are starting to put pressure on their much larger competitors. Carolyn Pairitz profiles which ETFs offer unparalleled exposure to these high growth opportunities.
Disclosure: No positions at time of writing.