ETF Outlook for Thursday, July 3, 2014
Today investors will focus on three things: jobs, jobs, and more jobs. Oh, and maybe how quickly they can get out of work and on the road to beat the holiday traffic. There will likely be some big moves as volume will be low, allowing for above average volatility.
The Labor Department reported 288,000 jobs were added in June, blowing past the consensus estimate of right around 215,000. Despite that strong number, the Federal Reserve is not ready to change its tune anytime soon as evidenced by Janet Yellen’s speech this week. With the Fed on your side, stocks should continue their march towards all-time highs. Nonetheless the number was so strong that the Fed may start reconsidering sooner than previously thought.
Related Link: 4 ETFs With Upside Potential
Below are a few ETFs that may be on the move.
SPDR S&P 500 ETF (NYSE: SPY)
The broad based equity ETF set a new all-time high yesterday after a minimal 0.1 percent gain. Investors should expect some big moves early on for SPY, but odds are the ETF will end the session within one percent of its closing price yesterday. Remember that the stock market closes early today at 1pm ET.
iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT)
After the robust ADP jobs number yesterday bonds got hammered and TLT finished the day lower by 1.1 percent. The ETF was not far from closing at the lowest level in two months as investors believe the better than expected jobs numbers will lead to the Fed raising interest rates sooner rather than later. As interest rates increase, the value of bonds fall, thus TLT will not be a good investment in a rising rate environment.
SPDR Gold ETF (NYSE: GLD)
After a big rally the last month the price of gold consolidated the last two days just below a significant resistance level. For GLD $128.25 is a level that it will have trouble breaking through. Yesterday the intraday high was $128.24 and it closed at $127.70. The jobs number will move the price of the precious metal and pre-market the ETF is already trading lower.
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