A better-than-expected May jobs report was the catalyst to
lift U.S. stocks to another strong showing last week.
Employers added 175,000 new jobs last month, but the
unemployment rate rose to 7.6 percent from 7.5 percent. Still,
that was enough to hearten the bulls. Over the last two days of
the week, the S&P 500 surged 2.1 percent to notch a weekly
gain of 0.8 percent.
All three major U.S. indexes gained more than one percent on
The good thing about the jobs report, except for the part
where the unemployment rate rose and the March and April numbers
were revised lower, is the part where it probably was not strong
enough to bring an immediate end to quantitative easing. However,
a watered down version of QE appears likely and perhaps as soon
as late in the third quarter. That is a reality markets must
That and plenty of other issues in the week ahead that should
have a meaningful impact on the following
ProShares UltraShort FTSE China 25 (NYSE:
) We are getting right to the heart of matter with the inclusion
of FXP on this week's list. Rather than recommend a short
position in the iShares FTSE China 25 Index Fund (NYSE:
), a long position in the double-leveraged FXP could be the
alluring play for the early part of this week. It is obvious why
that is the case.
China's exports rose just one percent last month, the lowest
increase since July 2012. Economists expected a 7.3 percent
increase. Imports fell 0.3 percent, but economists expected a six
percent rise. At this writing, retail sales and industrial output
data for May had not been released, but a Reuters poll taken
before Sunday's retail and industrial data shows industrial
output is seen up 9.3 percent, unchanged from April, while growth
in fixed-asset investment, one of the two main drivers of China's
economy in 2012, likely rose 20.5 percent in the first five
months of this year,
Markets are pricing in disappointment. When U.S. stocks soared
Friday, FXI fell, meaning FXP was up. FXP also crept above its
200-day moving average last week, a bullish sign.
iShares MSCI Frontier 100 ETF (NYSE:
) There is an obvious reason why the iShares MSCI Frontier 100
ETF makes this week's list and, no, it is not the ongoing
frontier markets of their emerging markets
Rather, on Tuesday, index provider MSCI (NYSE:
) announces its annual market reclassification and that could be
big news for Qatar and the United Arab Emirates. Qatar and UAE
have been angling for a promotion to emerging markets status for
several years, only to have been rebuffed by MSCI on the past
There is no denying that stocks
in Dubai have been among the world's best
performers this year
. Shares listed in Abu Dhabi, another Emirate, have been stellar
as well. MSCI's decision could mean a epic near-term bounce or
sell-off for FM and other frontier ETFs. There is not likely to
be any middle ground.
WisdomTree Equity Income Fund (NYSE:
) The WisdomTree Equity Income Fund merits consideration not
because there are a slew of news events scheduled this week that
could affect the ETF's 350 components. DHS is worth a look
because although concerns about rising interest rates remain
high, investors still like dividend stocks. It is merely a matter
of being properly positioned in the dividend stock arena for
future payout growth.
has been previously noted
, DHS accomplishes that with a 24.4 percent combined weight to
technology and financial services names.
Additionally, the fund is more attractive than some of its
larger, more heralded rivals on the basis of yield and total
returns. DHS has a trailing 12-month yield of 3.2 percent, about
100 basis points higher than the largest dividend ETF.
For more on ETFs, click
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advice. All rights reserved.
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