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

by on July 23, 2012 | ETFs Mentioned:

Yet another active week for stocks, as the better-than-expected corporate earnings season and a slew of sour economic data vied for the spotlight. While the Untied States struggles to stay on the path of recovery and the eurozone continues to battle its debt crisis, investors are looking towards strong corporate earnings as a bright spot in the U.S. market. The coming week will be chock full of several bellwether stocks’ earnings announcements as well as a handful of  major economic reports. Below, we outline three ETFs that should see a fair amount of activity during the week ahead [see also 5 Tips ETF Traders Must Know].

1. MSCI United Kingdom Small Cap Index Fund (EWUS)

Why EWUS Will Be in Focus: EWUS aims to measure the equity securities performance of small-cap companies whose market capitalization represents the bottom 14% of the British securities market. Since the fund provides “pure” play exposure to the U.K’.s local economy, it will be important to keep a close eye on EWUS on Wednesday as the United Kingdom’s GDP is reported.

2. Industrial Select Sector SPDR Fund (XLI)

Why XLI Will Be In Focus: This fund is one of the most popular in the world, with over $3 billion in assets and an average daily volume just over 17 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 are slated to come out on Thursday. The last report indicated a slowdown in demand for durable goods in the month of May; analysts are expecting a further slowdown in June [see also 17 ETFs For Day Traders].

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

Why VXX Will Be in Focus: When it comes to measuring the level of uncertainty in the United States, no fund is as prolific as VXX, which exchanges hands over 48 million times per day. Its focus will come later on in the week as the U.S. GDP is released. Analysts are expecting a slight slowdown in economic growth; the forecast is at 1.5% versus the previous reading of 1.9%. Should this result disappoint, VXX may see an increased level of activity, since a sign of a weakening economy will likely spark a rise in volatility. However if GDP comes in better than expected, market volatility may cool off.

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Disclosure: No positions at time of writing.