ETF Outlook for Tuesday December 17, 2013:
PowerShares Leisure & Entertainment ETF (NYSE: PEJ)
Starbucks announced that one in every ten Americans received a gift card last year an on one single day before Christmas over 2 million cards were sold. By bringing in upwards of $16 billion through 450 million cards over the years it is clear the program works for the company. SBUX is expecting sales this year to exceed that of last year and it could be another boost to the already strong year for the stock.
PEJ has a 4.7 percent allocation to SBUX and 2.6 percent in competitor Dunkin’ Brands. PEJ is setting up nicely for a bounce after a small pullback to begin the month of December.
iShares U.S. Medical Devices ETF (NYSE: IHI)
Leerink Swann, a firm specializing on health care companies released a research note on the medical device sector. Some of its top names for 2014 in what they call the MedTech space include Heartware, Covidien, St. Jude Medical and Intuitive Surgical.
All four stocks are in IHI with the last three falling into the top eight holdings for the ETF. In the face of potentially higher fees for medical devices from Obamacare, the ETF has been able to continue moving higher, hitting an all-time high a couple weeks ago. If the ETF can hold support at $88 during the current pullback it will be yet another buying opportunity for IHI.
SPDR Dow Jones Industrial Average ETF (NYSE: DIA)
Two of the top five holdings in the ETF are moving higher pre-market after the release of positive news. Shares of 3M Company are higher by 2.5 percent after raising its dividend by 35 percent and offering in-line guidance for 2014. The yield on MMM increases from 2.0 percent to 2.6 percent.
See also: The S&P 500's Biggest High Dives of 2013
The shares of Boeing are also on the move by more than 2 percent after increasing its dividend by 50 percent and increasing its stock buyback program by $10 billion. The dividend yield on BA now stands at 2.1 percent. DIA, which tracks the Dow quotes investors follow on the internet and television, is trading 1.2 percent below an all-time high and if the pattern continues the ETF should be see highs in the coming week.
First Trust NASDAQ Global Auto Index ETF (NYSE: CARZ)
A slew of positive news out of General Motors and Ford, the past few days along with positive industry-wide news should have CARZ on the move higher. The ETF has not been able to track good volume recently even though the news flow for the sector has been improving. GM is at a new post-bankruptcy all-time high and F has rallied over 3 percent in the last few days.
The Japanese automakers have been struggling, but the turnaround from the short-term pullback looks like it is on the horizon. The combination of bullish action in the U.S. auto stocks combined with a rebound in the Japanese auto stocks should lead to a breakout in CARZ in the coming week.
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