5 ETFs to watch this week

Investors should keep an eye on exchange-traded funds that own Home Depot, Lowe's and Wal-Mart.

By TheStreet Staff Nov 14, 2011 12:59PM

By Don Dion, TheStreet


Hthe streetere are five ETFs to watch this week:


1. SPDR S&P Homebuilders ETF (XHB)


Housing-related retail giants Home Depot (HD) and Lowe's (LOW) are reporting their earnings and provide outlooks in the closing days of earnings season. The two are notable holdings within the XHB and iShares Dow Jones U.S. Home Construction Index Fund (ITB).


Earnings-related news should impact the performance of this industry during the first half of the week. Meanwhile, economic events such as the housing starts report will drive action during the second half.


Homebuilders have seen some strength in recent weeks but I continue to encourage conservative investors to look elsewhere for real estate exposure. The iShares Cohen & Steers Realty Majors Index Fund (ICF) remains an attractive bet.


2. iShares MSCI Italy Index Fund (EWI)


The eurozone's economic drama has created a choppy trading environment over the past few weeks. Looking to the days ahead, this choppiness will likely continue.


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Funds like EWI will be interesting to watch, but as I've explained on a number of occasions, this part of the developed world is not for the faint of heart. Rather, with nations like Italy and Greece still struggling to sort out their respective issues, the countries in this monetary bloc should only be tested by aggressive and risk tolerant short term traders.


3. iPath S&P 500 VIX Short-Term Futures ETN (VXX)


During the middle of last week, renewed concerns about Europe's economic woes helped to reinvigorate the fear-tracking VIX, pushing it to staggering highs. In the days that have followed, these gains have been wiped out. In a similar fashion, VXX struggled during the latter half of the week as well.


Looking to the near term, VXX and VIX should be interesting to watch. While jitters have returned, it is unclear whether the fear index can capitalize. Thanks to last week's run-up, VXX managed to ascend above its 50-day moving average for a short period of t time. The VIX index, however, appears to be struggling against this level. Since the latter half of October, it has tested this point on three separate occasions.


4. SDPR S&P Retail ETF (XRT)


Although Black Friday is still a few days away, many consumers have likely already started their holiday shopping. For investors looking for exposure to retail destinations, XRT is a fund to keep on the radar.


From an earnings perspective, retail will be in focus. Wal-Mart (WMT) will report its quarterly performance numbers on Tuesday, marking the symbolic end to this earnings period. The company's showing will likely provide investors with ample clues as to the state of the global consumer.


The discount giant is not alone, however. Target (TGT), Abercrombie & Fitch (ANF), TJX Companies (TJX), Gap (GPS), and Sears Holdings (SHLD) are other notable retail names that will report earnings.


Finally, retail-hungry investors will also want to keep a close watch on the economic calendar. On Tuesday, the retail sales report will provide important clues on consumer spending.


5. United States Oil Fund (USO)


Crude oil prices have stuck to a steep upward path since the start of October and, as we approach the middle of the month, the closely monitored commodity is flirting with the $100 mark.


Oil bulls may be tempted to jump into the futures-backed USO to gain exposure to crude. However, in the past I have found that equity-based ETFs like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) have been more reliant ways to track the resource.



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