3 ETFs To Watch This Week: FXI, XLI, VXX

by on December 31, 2012 | ETFs Mentioned:

With no concrete solutions on the table regarding the much-feared fiscal cliff, it wasn’t terribly surprising to see equity markets take a beating last week. Profit-taking pressures have been a dominant theme as negotiations in Washington D.C. have proven to be riddled with gridlock, prompting many to lock in gains ahead of the potential tax hikes. This holiday-shortened week, investors will once again see a number of key 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 13 Rapid Fire ETF Ideas For 2013].

1. FTSE China 25 Index Fund (FXI, A-)

Why FXI Will Be In Focus: This ETF is a favorite among active traders looking to tap into China’s equity market, and it may see an increase in trading volumes on Tuesday morning as investors react to manufacturing data released the night before. With China’s slowing growth proving to be a key concern for many around the globe, this upcoming PMI report will be watched by many. Analysts are expecting the manufacturing reading to come in at 51, marking a slight improvement over last month’s reading of 50.6 [see also How To Pick The Right ETF Every Time].

2. Industrial Select Sector SPDR (XLI, A)

Why XLI Will Be In Focus: The domestic manufacturing sector will come into the spotlight as well later in the week on Wednesday morning when ISM data hits the street. XLI, which holds bellwether companies like General Electric Co (GE), Caterpillar Inc (CAT) and Boeing Co (BA), could gap in either direction depending on investors’ reaction to the latest manufacturing data. Analysts are expecting for ISM data to come in at 50.3, marking a slight improvement over the previous reading of 49.5 [see also 17 ETFs For Day Traders].

3. S&P 500 VIX Short-Term Futures ETN (VXX, B+)

Why VXX Will Be In Focus: The Volatility Index (VIX) could start 2013 on a high note if the latest U.S. employment report sends investors scrambling to take profits. VXX could be in for a wild trading session on Friday if unemployment results greatly deviate from estimates; analysts are expecting for nonfarm payrolls to come in at 145,000 while the unemployment rate is expected to remain steady at 7.7% [see also Low Volatility ETFdb Portfolio].

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Disclosure: No positions at time of writing.