ETF Outlook for Wednesday, April 30, 2014:
Global X Social Media ETF (NYSE:SOCL)
Shares of nearly every social media-related stock are lower Wednesday morning after Twitter (NYSE:TWTR)reported quarterly earnings that were not met with enthusiasm.
The stock is down over 10 percent in early morning trading to the lowest level since it went public last year. The black cloud that has been hanging over the social media niche sector has just gotten bigger and SOCL is set for big losses to begin the trading day. The only support in the near-term for SOCL is the low of Monday at $16.60, below that the ETF could see the high $14 level.
SPDR Technology ETF (NYSE:XLK)
The TWTR debacle on top of eBay (NASDAQ:EBAY) lower by nearly four percent after their earnings call has the entire technology sector on edge this morning. The one saving grace for XLK is that its largest holding, Apple (NASDAQ:AAPL), is up this morning and may help soften the blow of its technology peers.
The chart of XLK shows an ETF in the middle of a trading range it has been in for several months. A close above $37 would be a breakout, while a breach below $35.25 would be troublesome. The ETF closed Tuesday at $36.34.
Global X FTSE Norway 30 ETF (NYSE:NORW)
The often-overlooked Scandinavian country broke out to the highest level since November of last year and is closing in on a multi-year high. The reason for the breakout is the ETFs largest holding, Statoil (NYSE:STO), an integrated oil and gas company.
The stock makes up 21 percent of the ETF and was up 4 percent yesterday to the best level since 2008. The ETF is heavily invested in the energy sector, 43 percent, which is another reason for the recent outperformance. The ETF is a sold play for investors that are looking for energy exposure as well as international diversity.
iShares Barclays 20+ Year Treasury Bond ETF (NYSE:TLT)
The first quarter GDP was revised down significantly from the original estimate above two percent to 0.1 percent this morning. As soon as the news hit the price of bonds moved higher as yields fell.
However, as the morning trading progressed, the yields began to increase and the 10-year was last yielding 2.69 percent, only one basis point below yesterday. With more news coming out today from the FOMC, the volatility in TLT should be above average as investors try and decipher the future of the tapering and the U.S. economy.
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