Eurozone drama and economic uncertainty had equity markets in a volatile ride last week, with stocks posting their worst one-day drop this year last Monday. Though bullish momentum has undeniably been a dominant force on Wall Street since the new year, controversies surrounding a criminal investigation into Italian banks and a scandal concerning Spanish Prime Minister Mariano Rajyo brought investors’ global economic uncertainties back to the forefront. Meanwhile, investors digested a mixed bag of earnings and economic data, though a surprisingly good reading of the U.S. trade deficit on Friday helped stocks gain back some earlier losses. This week, investors will once again see a slew of economic and earnings reports. 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. Market Vectors Retail ETF (RTH, B+)
Why RTH Will Be In Focus: This ETF tracks an index that is comprised of the 25 largest U.S.-listed, publicly-traded retail companies, a targeted sub-sector of the consumer discretionary space. Top holdings include the behemoth Wal-Mart, online retail giant Amazon and Home Depot. Investors should keep a close eye on RTH on Wednesday and Friday as retail sales and consumer sentiment are reported, respectively. Retail sales are expected to come in at 0.1% compared to the previous reading of 0.5%, while consumer confidence is expected to see an uptick [see also 17 ETFs For Day Traders].
2. MSCI Japan Index Fund (EWJ, A+)
Why EWJ Will Be In Focus: This fund is designed to measure the performance of the Japanese equity market, and it is home to over $5.7 billion in total assets. Its focus will come in the middle of the week as the Bank of Japan is slated to announce its rate decision and the country’s preliminary fourth-quarter GDP is reported. Any statements made by the central bank at its press conference will be closely watched, and any surprises could put EWJ in for a volatile trading session.[Be sure to check out the real estate news, trends, tips and tricks over at Dividend.com].
3. CurrencyShares Euro Currency Trust (FXE, A)
Why FXE Will Be In Focus: This ETF offers exposure to the euro relative to the U.S. dollar, increasing in value when the euro strengthens and declining when the dollar appreciates. Investors should keep a close eye on FXE this week as the region’s GDP is reported on Thursday. Considering ECB President Mario Draghi’s statements last week, a weak GDP reading may have significant effects on the currency [see also How To Pick The Right ETF Every Time].
Disclosure: No positions at time of writing.