Three ETFs To Watch This Week: IAH, TLT, USO

by on November 21, 2011 | ETFs Mentioned:

This past week presented yet another frustrating set of circumstances for investors to digest. Not only have European woes been weighing heavily on markets, but the U.S. debt committee has until Wednesday to pass an important budget haircut and for the time being, all signs point to a deadlock. August saw equities tumble when the committee nearly failed to reach an agreement as investors endured one of the most volatile months in recent history. Overall, equities had a rough week, with two straight days of heavy losses that could not be recovered from. Perhaps the biggest story on the week came from oil smashing through the $100/barrel mark, though crude would subsequently fall the following two days. Though the coming week is relatively sparse as far as data is concerned, all eyes will be fixated on Congress as they will be something of market makers for the majority of the week [see also 25 Ways To Invest In Silver].

Below, we outline three ETFs to keep a close eye on as the week plays out:

HOLDRS Internet Architecture (IAH)

Why IAH Will Be In Focus: This HOLDR product, which is scheduled for conversion, should see strong activity early on in the week. IAH features a who’s who of tech companies like Apple, IBM, and Dell in its top holdings. But the fund will come under the limelight starting Monday when its third highest holding, Hewlett-Packard, reports quarterly earnings. HPQ, which makes up over 10% of the entire ETF, is expected to haul in EPS of $1.13 with revenues topping $32 billion. Investors should take note that HPQ has beaten their last four analyst estimates, painting a positive picture for this week’s report. If the company hits its earnings as usual, look for IAH to see a nice jump on Monday that could persist through out the week. But if HPQ misses, IAH could be in for a rough string of trading days [see also Technology ETFs: Social Media, SSDs, Smartphones, and More].

Barclays 20 Year Treasury Bond Fund (TLT)

Why TLT Will Be In Focus: This ETF tracks the Barclays Capital U.S. 20+ Year Treasury Bond Index, which measures the performance of U.S. Treasury securities that have a remaining maturity of at least 20 years. As a T-bill product, this week will be especially important for TLT. The last time Congress nearly failed to sign a debt agreement, yields saw a high amount of volatility, which also means that prices did the same. Look for TLT to be active on Monday and Tuesday out of pure speculation, but Wednesday will be the real key. Depending on which way Congress goes this fund could be in for a rough week. Not to worry though, its 25 million shares outstanding and near $3 billion in assets make this an extremely liquid option if you should feel the need to quickly exit a position [see our Euro Free Europe Portfolio].

United States Oil Fund (USO)

Why USO Will Be In Focus: USO, arguably one of the most popular commodity ETPs on the market, tracks front month futures for West Texas Intermediate crude oil. Though there is no particular event that will put crude into focus in the coming trading days, its high activity last week makes it a prime candidate for a closer watch. Wednesday saw oil surge by nearly 4% only to give up most of those gains the following day. With oil’s price heavily tied to equity performance, USO can almost be thought of as a volatility product until the global economy smooths out [see also Crude Oil Guide: Brent Vs. WTI, What’s The Difference?].

Disclosure: No positions at time of writing.