Commodities and Deal-Making Push ETFs Higher | ETF Trends

ETFs are heading higher on Wall Street, but with no key economic data on the calendar, the focus fell to a bond auction later and to expectations for continued gains in commodity prices.

  • “I suspect the market will make attempts to close at a new high in sluggish trading,” said Peter Cardillo, chief market economist at Avalon Partners, Inc. He said market participants will also be watching an auction of 7-year Treasury notes today. The government saw weak demand from investors for an auction of 5-year notes on Tuesday, which has created a backdrop of bearishness for the $29 billion auction of 7-year notes, though the U.S.’s debt auction Monday went off better. Investors looking for a bond play can consider the iShares Barclays 3 – 7 Year Treasury Bond ETF (NYSEArca: IEI), which is up slightly ahead of the auction.
  • Shares of BJ’s Wholesale Club Inc. (NYSE: BJ) are up approx 6.5% this morning after the New York Post cited unnamed sources as saying buyout firm Leonard Green & Partners might launch a hostile bid for the warehouse-club retailer. The Rydex S&P MidCap 400 Pure Value (NYSEArca: RFV) is moving up in early trading; BJ’s is 2.4% of the ETF.
  • Alongside BJ’s, stocks expected to attract equity-market attention are Allstate Corp. (NYSE: ALL), which reportedly has sued Bank of America Corp. (NYSE: BAC) and its Countrywide Financial unit over a $700 million investment made by the insurer in residential-mortgage-backed securities. Financial Select Sector SPDR (NYSEArca: XLF) is down 0.2% so far today on the news; BAC is 7.2%.
  • Metals prices are likely to be a focus of the markets after gold futures for February delivery closed up $22.70 at $1,405.60 an ounce Tuesday in the largest one-day gain since early November. Those futures were last off $3.4 to $1,402.20 an ounce. The ProShares Ultra Silver ETF (NYSEArca: AGQ) is benefiting from the bullish commodity trend, up approx 2% in early trading.

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Gregory A. Clay contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.