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Monday, October 22, 2012

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

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050128-O-XXXXO-002 (Photo credit: mashleymorgan)
Chicago, Oct.22, stock investing .-  Wall Street is well into the third quarter's earnings season, with early euphoria quickly dissipating as several recent earnings reports have shaken investor’s once-cheery outlooks. Bellwethers IBM, Intel, Google, Microsoft, GE and McDonald’s all missed their marks last week, cutting short the initial earnings-fueled bull rally. On the macro front, mixed economic data added to last week’s volatile trading. This week, investors will once again see a number of earnings and 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 7 Simple & Cheap ETF Model Portfolio]:

1. 3x Long 25+ Year Treasury Bond ETN (LBND)

Why LBND Will Be in Focus: This leveraged Treasury bond fund is a powerful tool for investors, offering 3x exposure to Ultra T-Bond Futures, whose underlying assets are U.S. Treasury bonds with a maturity of 25 years or more. LBND’s focus will come in the middle of the week, as the Federal reserve announces its key interest rate decision on Wednesday. Although the rate is expected to stay the same at 0.3%, any deviation may trigger significant swings in this ETF [see also 17 ETFs For Day Traders]. 

2. 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 United Kingdom’s local economy, it will be important to keep a close eye on EWUS on Thursday as the United Kingdom’s third quarter GDP is reported. Analysts are expecting this figure to come in around 0.6%.

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

Why VIX Will Be In Focus: When it comes to measuring the level of uncertainty in the United States, no fund is as prolific as VXX. Its focus will come in on Friday as the U.S. third quarter GDP is released. Analysts are expecting annualized third quarter economic growth to increase to 1.8%. In addition to GDP data, the University of Michigan consumer confidence is also slated to come out; forecasts are pointing to slight decrease in confidence. Should any of these results disappoint, VXX may see an increased level of activity, since a sign of a weakening economy and low consumer confidence will likely spark a rise in volatility. However, if the reports come in better than expected, market volatility may cool off. [see also How To Pick The Right ETF Every Time]. ... Continue to read.
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