ETF Winners on Possible Debt Deal (ITB, XLF, ITA, SOCL, XBI)


The stock markets around the globe are blasting higher today on the news of a possible deal to raise the debt ceiling. There has not been any definitive news announced as of yet, however the rumors alone are enough to bring investors back to the market.

With nearly every ETF, sans gold, moving higher Thursday, it is important to look at the biggest movers in anticipation of a deal in the near future. Below are a few of the largest gainers on the day.

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After falling 12 percent in the last three trading days, XBI is bouncing back today with a gain of 3.8 percent. There is no direct link between the government shutdown and the biotech sector, however the selling of perceived risky sectors did equate to XBI taking a beating. The ETF will need a few more big days just to get back to where it began the week.

iShares Dow Jones U.S. Home Construction ETF (NYSE:ITB)

The housing sector could be affected by the government shutdown in a variety of ways. The most direct is related to mortgage applications. The process can be either slower or non-existent in certain situations. There is also the perception of potential homebuyers that the government shutdown is bad for everyone and everything in the country and could delay any big purchases. The ETF was already in a downtrend and is due for an oversold bounce.

SPDR Select Financials ETF (NYSE:XLF)

It is not a surprise the financials are rallying with the news of a potential deal on the debt situation. The sector tends to move with the headlines and can be directly affected by government not raising the debt ceiling. After pulling back six percent in the last two weeks the ETF is rallying 2.7 percent today.

iShares Dow Jones U.S. Aerospace & Defense ETF (NYSE:ITA)

The furlough workers the news keeps referring to come from all types of government sectors, but one particularly affect is defense. The ETF fell 6 percent from an all-time high and is bouncing to the tune of 2.9 percent today. ITA may be the ETF that has the most to lose with a prolonged government shutdown.

Global X Social Media ETF (NYSE:SOCL)

Social media and the government shutdown go together like water and oil. They could not be further apart. However, the issues in D.C. forced investors to rethink their allocations and the first to sell are the winners and the risky stocks. This is why technology fell big yesterday and in particular the social media ETF. The ETF is attempting a comeback with a gain of 3.2 percent today.

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