Most markets inched higher last week, but hit a bit of road bump on Friday after investors digested news of declining consumer sentiment for January and a worse-than-expected GDP report. Gold and oil both traded lower during the week, but both commodities were able to stage a small rallies on Friday amidst all the uncertainty that weighted down equities. International markets didn't fare too well last week either, with civil unrest continuing to develop in Egypt, Standard and Poor's downgrading Japan, and a suicide bomber attack in Moscow's Domodedovo airport, which killed at least 35 people and injured more than 100.
This week is stacked with earnings reports from major industry leaders as well a handful of economic reports including ISM Manufacturing Index, personal income, and construction spending. Below we profile three ETFs that will be in for an active week.
Vanguard Energy ETF
Why VDE Will Be in Focus: This fund has Exxon Mobil Corporation
HOLDRS Merrill Lynch Pharmaceutical
Why PPH Will Be in Focus: Pharmaceutical giant Pfizer
Rydex CurrencyShares Euro Currency Trust
Why FXE Will Be in Focus: The fund will come into focus as the European Central Bank announces its decision regarding interest rates on Thursday at 7:45 a.m. (ET). FXE tracks the Euro by following the EUR/USD exchange rate [see FXE Fundamentals]. Analyst consensus is for the rate to remain unchanged at 1%. Traders and investors will be paying more attention to the press conference following the rate decision, during which the bank's president, Jean-Claude Trichet, will make an official statement as well as answer questions from the media. While the market is expecting for the rate to remain unchanged given the worrisome debt situations of Ireland, Spain, and Portugal, it's not impossible for the euro to spike in either direction following the ECB press conference. Considering the recent run-up that FXE has enjoyed, combined with currency market risks/volatility, it’s recommended for traders to stay out of FXE until the entire press conference is over [also see Time for a Leveraged Euro ETF?].
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