With the fourth quarter earnings season well on its way, investors once again faced a slew of mixed reports last week. Bellwether Goldman Sachs (GS) rallied after the company posted fourth quarter earnings that nearly tripled expectations. JP Morgan Chase (JPM) shares, however, declined even after the financial giant exceeded earnings estimates, in part due to the company’s increased mortgage lending profit. Financial giants Bank of America (BAC) and Citigroup (C) both missed expectations, while BlackRock (BLK) and Fifth Third Bancorp (FITB) beat analysts’ forecasts.
Meanwhile in economic news, U.S. housing starts popped in December, bucking economists’ expectations. Despite the plethora of seemingly positive data, investors remain cautious as Washington continues its talks concerning the nation’s debt ceiling. 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. CurrencyShares Japanese Yen Trust (FXY, C+)
Why FXY Will Be In Focus: This fund offers exposure to the Japanese yen relative to the U.S. dollar, increasing in value when the yen strengthens and declining when the dollar appreciates. As such, its focus will come at the beginning of the week when the Bank of Japan releases its rate decision. The central bank is also expected to make a monetary policy statement, in which many investors believe a new round of stimulus measures will be announced. Should there be any deviations from expectations, FXY may be in for an active and volatile day [see also 17 ETFs For Day Traders].
2. SPDR Homebuilders ETF (XHB, A+)
Why XHB Will Be In Focus: With over $2.3 billion in total assets under management, this ETF is by far the most popular option for investors looking to add exposure to the homebuilding industry. Its focus will come on Tuesday as U.S. existing home sales are reported, and Friday as new home sales are reported. Analysts expect an uptick in both new and existing home sales; this comes after last week’s better-than-expected housing starts and building permits data [Be sure to check out the real estate news, trends, tips and tricks over at Dividend.com].
3. MSCI United Kingdom Small Cap Index Fund (EWUS, B)
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 United Kingdom’s local economy, it will be important to keep a close eye on EWUS on Friday as the United Kingdom’s preliminary fourth quarter GDP is reported. Analysts are expecting this figure to come in around -0.2% compared to the previous reading of 0.9% [see also How To Pick The Right ETF Every Time].
Disclosure: No positions at time of writing.