A spate of deal-making helped lift stocks last week as the S&P 500 added 0.1 percent. That does not sound like much, but it was enough for the seventh consecutive up wee for the benchmark U.S. index.
Sturdy economic reports, decent earnings and now mergers and acquisitions activity have been the recent catalysts giving the bulls reasons to cheer.
Still, there are some causes for concern. Earnings season is drawing to a close. The sequestration debate looms and deal-making alone cannot prop up the entire market.
Not to mention, emerging markets equities, broadly speaking, have not been stellar performers to start the year. Add those factors to the fact that the U.S. dollar is showing signs of life and a case can be made that risk appetite is fading.
It is should be noted that the latter stages of February are usually not kind to stocks. With that in mind, keep an eye on the following ETFs in this holiday-shortened week.
Direxion Daily Gold Miners 3X Bear Shares (NYSE: DUST)A familiar friend makes another appearance on this list. Not to toot our own horns too much, but DUST was touted in these parts as back as mid-October. Since mid-November, the fund has surged 50.5 percent.
A run like that may make it seem as though DUST is poised to take a break. Actually, the opposite might be true. Gold itself now looks quite vulnerable and that is bad news for the miners that struggled when gold was rising. Also consider the PowerShares DB Gold Double Short ETN (NYSE: DZZ).
WisdomTree Japan Hedged Equity Fund (NYSE: DXJ)One of 2013's most successful ETFs, both in terms of asset-gathering and pure performance, makes another appearance on this list. And with good reason. The dollar surged against the yen during Monday's Asian session after the G-20 declined to censure Japan for allowing the yen to fall so far so fast against the greenback and the euro.
That could leave the door open for the Bank of Japan to engage in stimulus and/or asset-buying later this year. Speaking of BoJ, Prime Minister Shinzo Abe will reportedly name the new leader of the central bank as soon as this week and it very well could be former Deputy Governor Toshiro Muto.
That sets up nicely for DXJ, USD/JPY and Japanese equities because Muto will tow the Abe line, which is to engineer inflation while deploying bold tools and unlimited easing to jolt the world's third-largest economy.
Those looking for another way to play this trade may want to consider put options on or outright shorting of the iShares MSCI South Korea Index Fund (NYSE: EWY) as South Korean exporters are seen as vulnerable due to the weaker yen.
PowerShares Dynamic Food & Beverage Portfolio (NYSE: PBJ)Thanks to Warren Buffett's thirst for mega-acquisitions, oft-overlooked PBJ is flying high these days. Buffett's Berkshire Hathaway and a Brazilian partner announced they will acquire PBJ's largest holding, H.J. Heinz (NYSE: HNZ), last week for $28 billion.
Buffett may not be done and the food industry is fertile ground for the man that loves easy-to-understand, highly profitable businesses with recognizable brands.
At least another 10 percent of PBJ's weight, that being General Mills (NYSE: GIS) and Hershey (NYSE: HSY), have been mentioned as as possible Berkshire targets. J.M. Smucker (NYSE: SJM) and, to a lesser extent, Kellogg (NYSE: K) could also be Berkshire targets. Both are PBJ holdings.
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