Stocks just keep on chugging higher. Buoyed by a surprisingly
strong February jobs report, the S&P 500 and the Dow Jones
Industrial each gained about half a percent last Friday.
For the week, the S&P 500 added 2.2 percent and is now
just one percent below its all-time high. The Dow made a
succession of new record intraday highs last week.
The S&P 500 has finished higher in nine of the past 10
weeks. While last week was heavy on economic data catalysts, the
same cannot be said of this week. Retail sales on Wednesday and
the consumer price index data, due out Friday, will be among the
marquee reports. However, a lack of earnings and economic-related
catalysts could mean some resting time for the bulls.
Or it could mean investors that are fearful of missing out on
the rally start arriving to the party. In either case, the
following will be among the
traders will want to keep an eye on in the week ahead.
Financial Select Sector SPDR (NYSE:
) The Financial Select Sector SPDR or any of its equivalents are
worthy of a place on this week's list after racing higher last
week due to some encouraging stress test results. However, this
week brings results of the more important bank stress tests, that
being the Comprehensive Capital Analysis and Review.
The Comprehensive Capital Analysis and Review is where
the Federal Reserve can approve or deny banks'
such as dividends and share repurchases. If the news on this
front is positive, particularly for the likes of Bank of America
) and Citigroup (NYSE:
), expect XLF and related ETFs to race to new highs. Leveraged
alternative: ProShares Ultra Financials (NYSE:
First Trust NYSE Arca Biotech Index Fund (NYSE:
) While there are no expected FDA headlines due out this week
that could impact FBT and its holdings, it should be noted this
ETF and its rivals have been racing to new all-time highs in
recent days. That does not mean investors have missed out on the
biotechnology rally. In fact, the back half of March is
loaded with potential catalysts for the sector
In the meantime, strong uptrends in holdings such as Celgene
) and Gilead Sciences (NASDAQ:
) should continue to support FBT. As should the biotechnology
sector's relatively low correlation to the S&P 500 in the
event of a pullback. If FBT does pullback, something that does
not look imminent, investors can consider adding to existing
positions in the $51-$52 area.
iShares MSCI Emerging Markets Index Fund (NYSE:
) EEM, the second-largest emerging markets ETF by assets under
management, has been
somewhat of a laggard this year
, but the fund is starting to show some signs of life.
Not only did EEM rise nearly two percent last week, but its
chart is improving and
options traders are showing a bullish bias with
The near-term keys for EEM include continued bullishness in
Brazilian stocks and any potential for a rebound in Chinese and
Indian shares. Also consider the PowerShares DWA Emerging Markets
Technical Leaders ETF (NYSE:
) as an alternative or complement to EEM.
For more on ETFs, click
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