ETF Outlook for Tuesday, February 11, 2014
First Trust ISE Cloud Computing Index ETF (NYSE:SKYY)
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Cloud computing stock Rackspace (NYSE:RAX) announced its CEO is quitting and that their profit fell by 30 percent. As imagined, the news has sent the stock lower by double-digit percentages this morning as investors exit the shares.
The stock is not was prominent of a name in the niche cloud computing space as it was in the past, however it will have a ripple affect through the sector and SKYY could see some early selling pressure.
iShares Dow Jones U.S. Health Care Providers Index ETF (NYSE:IHF)
Yet another change for the health care act referred to as Obamacare. The government announced yesterday that they are delaying another mandate for employers. Companies with 50 to 99 full-time workers will not have to provided health insurance to their workers until 2016.
Originally the date was 2014, but was then delayed to 2015 and now it has been pushed back yet again. The one ETF that may be moving the most on the news is IHF, which is a basket of several of the health care insurance companies that are directly affect by the Obamacare announcements.
iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT)
New Fed Chair Janet Yellen will make her first Congressional appearance since taking over the roll last month. Yellen will be pressured about the ugly jobs numbers and how the Fed plans to continue with the unwinding of the QE program.
Every word will be analyzed and stocks will move throughout the session. Bonds will also be directly affected by the comments regarding QE and if the taper will continue at the current pace. Bonds were up slightly the last two days after a three-day sell-off last week.
SPDR S&P Retail ETF (NYSE:XRT)
The retail stocks took a beating in January, but a rebound the last few sessions has XRT back off the multi-month lows. This morning the Redbook Chain Store Sales came in with a gain of 2.8 percent year-over-year versus a gain of 2.7 percent last week. The ISCSC Retail Sales numbers increased by 2.3 percent over last year versus no gain for the same reading last week.
Adding to the decent numbers, the National Retail Federation forecasted retail sales to increase by 4.3 percent this year versus a gain of 3.7 percent last year. XRT will be a good benchmark for the overall sector and if the Yellen testimony does not hit stocks today, the rally in the ETF should continue.
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