ETF Outlook for Week of March 3, 2014
Market Vectors Russia ETF (NYSE:RSX)
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The Ukraine/Russia conflict heightened this weekend and some experts are predicting an all-out war over Crimea. On Monday morning the MICEX Index was lower by eight percent and the Russian Ruble was tumbling. The largest Russian ETF in the U.S. is RSX, which was already down 2.4 percent last Friday. Investors can expect massive selling for the ETF today on the open.
As long as the possibility of a war hangs over the region the ETF will struggle to find buyers. At the same time, the selling could create a buying opportunity in the coming weeks.
iShares MSCI Germany ETF (NYSE:EWG)
The mess in the Ukraine has spread to Western Europe. Germany led the region lower with a three percent loss this morning. The German economy is the largest in Europe and with their trading ties to Eastern Europe, it is not surprising to see the country falling on the news. Many Western Europe ETFs have gotten ahead of themselves in the short-term and the pullback on the conflict could result in a great buying opportunity by the end of the week, depending on how the situation plays out.
iShares MSCI Japan ETF (NYSE:EWJ)
The first country to open for the week after the news out of Ukraine hit the wires was Japan, and it was an ugly open. The major stock indices fell by over two percent before they were able to rebound and the Nikkei finished the first day of the week lower by 1.3 percent. The Japanese Yen was down 0.5 percent versus the U.S. Dollar, which is good news for Japanese exporters.
SPDR Gold ETF (NYSE:GLD)
The short-term luster in the gold ETF started to wane last week as it pulled back from multi-month highs. It appeared it was time for the precious metal to begin a pullback and resume the long-term downtrend. And then Ukraine happened. The world looked for a safe haven for its money and found gold.
The gold ETF was up over one percent in early trading on Monday and will likely find some buyers throughout the day, as safety is the theme to begin the week. With all that being said, it is important to focus on how the ETF trades in the first few days before making any knee-jerk decisions.
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