ETF Outlook For Thursday, July 24, 2014:
The S&P 500 was able to eke out a small gain on Wednesday, but it was enough to send the index to the best level ever.
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The NASDAQ is closing in on a new decade high, and the Dow lost ground as component Boeing (NYSE:BA) pulled it down. The catalyst for higher stock prices has been earnings with 78 percent of all companies that have reported beating their earnings estimates.
Revenue beats are also strong, hovering above 65 percent.
More earnings Thursday morning and after the bell last night should help the market open in the green. Adding to the positive tone is better than expected economic numbers out of Europe.
Global X Social Media ETF (NYSE:SOCL)
Shares of Facebook (NASDAQ:FB) are soaring after it reported strong earnings after the bell last night. The stock is set to open at the highest price ever and bring along the entire niche sector.
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SOCL has been struggling the last few months, but after Fed Chairman Janet Yellen called the sector overvalued it has been moving higher - go figure! Another top holding in SOCL is LinkedIn (NYSE:LNKD), which is higher Thursday morning as well after some merger news after the bell last night.
SPDR S&P Biotech ETF (NYSE:XBI)
The ETF led all other sector ETFs yesterday with a gain of 6.9 percent after one of its top 20 holdings, Puma Biotechnology (NASDAQ:PBYI), soared 295 percent after receiving good news from the FDA.
Another holding and large biotech stocks, Biogen Idec (NASDAQ:BIIB) surged 11 percent yesterday to help the other biotech ETFs that did not have exposure to XBI. Investors must remember the importance of knowing what is under the hood of the ETF they are considering by looking at the stocks in the allocation.
iShares S&P Europe 350 Index ETF (NYSE:IEV)
The continent has struggled lately as the U.S. stock market continues to hit new highs -- that is, until Thursday when the PMI numbers for the region were released. The Eurozone PMI for July came in at 54.0 versus a 52.8 estimate.
Germany also beat the estimate as well as France, which is now closing in on breaking above the 50.0 level once again. Stocks are higher across the pond, and IEV gives investors solid exposure to the major Western European nations.
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