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Monsanto To Drive Movement In Argibusiness ETF

Matthew McCall

ETF Outlook for Wednesday June 25, 2014

Market Vectors Agribusiness ETF (NYSE: MOO)

The largest holding in the ETF reports earnings before the bell Wednesday morning and it should have the entire sector on the move. Monsanto (NYSE: MON) accounts for 8.5 percent of the portfolio and has been in the news for more than just earnings this week. 

On Monday, a report came out that said Monsanto was in talks to merge with Swiss-based competitor Syngenta (NYSE: SYT). The news sent Syngenta to a new multi-month high as Monsanto hit a multi-year high on the news. Syngenta is the second largest holding in MOO and the news sent the ETF to a new 52-week high. Today expect MOO to be driven by the action in Monsanto.

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

The defense stocks have been struggling over the last month as they have not joined in the rally in the overall market. On Tuesday, the sector and ITA in particular lagged the market with a loss of 1.9 percent to close at a new one-month low.

Related Link: Russia ETFs Hit 5-Month High On Easing Ukraine Tensions

Shares of Boeing (NYSE: BA) hitting a new seven-week low helped spur on selling in a sector that could be hurt by governments cutting spending around the globe. The one silver lining could be perception that defense spending will increase if the geopolitical situations around the world do not start to subside.

SPDR S&P Russia ETF (NYSE: RBL)

The rebound in the Russian stock market continued on Tuesday as the conflict between Russia and the Ukraine appears to be subsiding for the time being. This calm has sent shares of the related ETFs much higher in the last three months. RBL closed Tuesday up another two percent to its best level since January. From the low in March, the ETF is up nearly 30 percent and based on valuations the country remains one of the most attractive in the world.

KraneShares CSI China Internet ETF (NYSE: KWEB)

Bucking the trend of lower equity prices yesterday were the shares of Chinese Internet stocks. KWEB closed the session up 0.5 percent with its peer the Global X China Technology ETF (NYSE: QQQC) gaining 1.8 percent. The ETFs, which were big winners early in 2014, have started to slowly come back after the drubbing all high flyers took in the March-April time frame. The niche sector is one to keep an eye on with above-average growth expected for at least several years.

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