ETF Outlook for Friday, March 14, 2014
iShares MSCI Germany Index ETF (NYSE:
The European ETFs took a beating Thursday with the regions top
economy leading the sell-off. EWG closed lower by 2.9 percent,
its biggest one-day drop this year. The situation in Ukraine has
slowly been getting worse and this has led to investors selling
stocks in the region.
The ETF has now moved to a level that bears watching. The 2014
low of $29.31 that was hit in early February could prove to be
support and an opportunity for the ETF to bounce. However, if the
news headlines remain negative it could have the ETF breaching
the important support level.
SPDR Utilities ETF (NYSE:
Other than the gold mining stocks, the only sector that was
able to close in the green yesterday was the utility stocks. XLU
finished with an impressive gain of 1.0 percent on heavy volume.
The closing price of $40.70 was the best level for the ETF in ten
months. Money was flowing into the sector for two reasons.
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First, the utilities are seen as a defensive sector when money
is flowing out of perceived high-risk sectors. Then there is the
yield factor. Most utilities pay above-average dividends and as
interest rates on bonds fall it makes the yields on the stocks
Rydex CurrencyShares Japanese Yen ETF (NYSE:
The currency that has been held down by the actions of the
Bank of Japan the last year rallied yesterday on the unrest in
the Ukraine. Prior to the manipulation by the Bank of Japan the
yen would act as a currency of safety when geopolitical events or
market sell-offs hit the headlines.
Apparently that strategy is back as money was flowing into FXY
at a rate not seen since June of last year. The move will likely
be short-lived as there is significant resistance at $97 and the
ETF closed at $96.07 yesterday.
iShares MSCI New Zealand Investable Market ETF (NYSE:
One of the few bright spots around the globe yesterday was the
action in ENZL, which closed at the best level since it began
trading in 2010. The gain of 0.8 percent was 190 basis points
better than the S&P 500 for the day. On Thursday the Reserve
Bank of New Zealand raised interest rate by 25 basis points to
It was the first major developed country to increase interest
rates since the U.S. began its tapering late last year. The bank
decided on the move due to a surge in economic growth that has
been driven by soaring dairy exports and a construction boom.
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