Homebuilder ETFs are breaking out to the highest level since 2008 on hopes the housing market recovery is for real. They’re also getting a boost from strength in home-improvement stocks such as Home Depot (NYSE: HD).
In the broader market, the S&P 500 was set for a weekly advance of 0.7%, the Dow added 0.4% and the Nasdaq Composite rose 1.6%.
SPDR S&P Homebuilders (NYSEArca: XHB) and iShares Dow Jones US Home Construction (NYSEArca: ITB) were poised for weekly gains of more than 5% in afternoon trading Friday. Heading into the session they were up 36% and 51% year to date, respectively, according to Morningstar.
Homebuilder confidence is also improving. The National Association of Home Builders/Wells Fargo Housing Market Index rose to the highest level since February 2007, according to a report Wednesday. [Housing ETFs Build Gains; Confidence Hits Five-Year High]
Home Depot reported solid quarterly results this week and its CEO said he now sees “stabilization” in some of the nation’s hardest-hit housing markets, MarketWatch reports.
ITB, the builder ETF, has a 4.1% position in Home Depot because the fund invests in housing stocks as well as pure-play builders. [Why a Homebuilder ETF is Outperforming Its Rival]
ETF Overview
The iShares MSCI Spain (NYSEArca: EWP) was the best-performing country ETF this week with a gain of more than 7% on speculation the European Central Bank will help shore up the troubled financial system. [Spain ETF at Summer High on Bailout Hopes]
An exchange traded fund tracking platinum rose following reports South African police killed 34 striking platinum miners. ETFS Physical Platinum Shares (NYSEArca: PPLT) is on track for a weekly gain of 5% with trading volume picking up dramatically Thursday and Friday. [Platinum ETFs Jump After Mine Strike Turns Deadly]
Elsewhere in commodities, energy ETFs were also strong this week on rising oil prices.
Conversely, Treasury ETFs were among the worst performers as 10-year Treasury yields climbed above 1.8% following the July low around 1.4%. [Treasury ETFs Could Fall More]
The top three unleveraged ETFs this week were iShares MSCI Spain, SPDR Homebuilders and iShares Dow Jones US Home Construction with gains of more than 5% at last check Friday.
The bottom three unleveraged ETFs this week were PIMCO 25+ Year Zero Coupon US Treasury (NYSEArca: ZROZ), Vanguard Extended Duration Treasury Index (NYSEArca: EDV) and Market Vectors Coal (NYSEArca: KOL) with setbacks of over 4%.
In next week’s economic data, look for reports on new and existing home sales, durable goods orders and the minutes from the latest Federal Reserve meeting.
iShares Dow Jones US Home Construction
