U.S. equities eked gains in a trading week shortened to three
days by Hurricane Sandy, but following Friday's sell-off,
traders' moods can be described as cautious as best heading into
next week. The Friday plunge came even as the Labor Department
reported the addition of 171,000 new jobs last month. In the
process, Thursday's gains were all but wiped out.
With Election Day looming on Tuesday, November 6, it is
reasonable expect a couple of days lethargic action until traders
know who the next president will be. It is widely expected that
win by Republican challenger Mitt Romney and GOP dominance in
House and Senate races could lift stocks in the near-term.
However, those scenarios are anything but foregone
Regardless of what happens on Tuesday, November is
historically kind to stocks
. Whether that trend plays out again could be decided as soon as
next week. With that, these ETFs should be in play.
PowerShares QQQ (NASDAQ:
It has been well-documented that ETFs with large weights to Apple
can be viewed as double-edged swords
. Such is life for QQQ. The Nasdaq 100 tracking fund does not
have the largest weight to Apple among ETFs, but with an 18.5
percent allocation to the iPad maker, QQQ is vulnerable to the
whims of that stock.
Now, QQQ could have a serious Apple problem. The stock closed
below its 200-day moving average on Friday, signaling a bull run
that seemed never-ending could be in serious jeopardy. That is
not good news for this ETF.
Financial Select Sector SPDR (NYSE:
With a gain of one percent over the past week, XLF has been
sturdy and it is worth noting the fund is just 2.4 percent below
its 52-week high. The near-term outlook for XLF and rival
financial services ETFs is easy to decipher and traders will set
that course as early as Wednesday morning. XLF and friends will
likely suffer a bit in the wake of President Obama winning
reelection. If challenger Romney pulls off the upset, the path of
least resistance with XLF will be to be long.
iShares MSCI Brazil Index Fund (NYSE:
The largest ETF tracking Latin America's largest economy has been
an admirable performer as of late as well. More upside could be
in front of the ETF following a bullish write up on Brazil
in the most recent issue of Barron's
Barron's notes Brazilian equities are cheap on a valuation
basis while reporting "investors have warmed to Brazil recently,
pouring $2.3 billion into Brazil-focused equity funds in the past
two months, reversing months of withdrawal."
Good signs to be sure, but keep in mind this little factoid.
Brazil was featured on the cover of Barron's almost exactly one
year ago. In the past 12 months, EWZ has tumbled 8.1 percent.
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