A Look Ahead: This Week's ETFs to Watch

Thanks to a strong jobs report, U.S. stocks soared last Friday with all three major indexes gaining about one percent. After the Labor Department said 195,000 new jobs were added last month and that the April and May figures were revised higher, the S&P 500 settled the week with a gain of 1.4 percent. Strong jobs data is, of course, a nice feather in the economy's cap and Friday's action indicates the market may finally be warming to the idea that good economic news is actually good, even if it means the Federal Reserve could begin tapering quantitative easing as soon as September. However, jobs data is in the past, at least for now. What is in the future is second-quarter earnings season, which kicks off Monday. Investors should be prepared for the worst. Citigroup strategists wrote recently that preannouncements were the most negative since 2009, Barron's reported. Or there could be some pleasant surprises. Either way, keep an eye on the following ETFs this week. SPDR S&P Regional Banking ETF KRE Bank earnings do not start flowing in earnest until next week and that gives investors enough time to get acquainted with the SPDR S&P Regional Banking ETF, an ETF that has recently been a stellar performer. KRE is in break-out mode after touching a new 52-week high last Friday on volume that was nearly double the daily average, a bullish sign, particularly on a day when broader market volume was thin. KRE is up 9.5 percent in the past month and the financial services sector is expected to post second-quarter earnings growth of almost 16 percent, according to Barron's. KRE is basically basically an equal-weight ETF. As such, it is not excessively weighted to the largest banks such as Bank of America BAC and Citigroup C. iShares MSCI Brazil ETF EWZ On a day when U.S. equities were surging last Friday, EWZ managed to touch a new 52-week low. That is had bad things have gotten for already downtrodden Brazil ETFs. It is not bad enough that a flailing economy with expected GDP growth of just two percent this year is hammering EWZ and other Brazil ETFs. Slack commodities demand, rising inflation and unemployment and a tumbling currency are weighing on Brazilian equities, the second quarter's worst performers among major global markets. Then there is Petrobras PBR, so often one of the causes of EWZ's woes. Brazil's state-owned energy giant is flirting with a close below $12, a price not seen since 2005. WisdomTree Japan Hedged Equity Fund DXJ It is not election season here in the U.S., but plenty of other ETFs have recently been and could soon be affected by domestic politics. In less than two weeks, Japan holds elections for control of its upper house of parliament and it is widely expected that Prime Minister Shinzo Abe's Liberal Democratic Party will cruise to victory, ending the country's hung parliament scenario. That could be excellent news for DXJ, which is up seven percent in the past month. Control of both houses of parliament could give Abe room to push even bolder economic initiatives aimed at further weakening the yen, a key component of DXJ's success. Also keep an eye on the newly minted WisdomTree Japan Hedged SmallCap Equity Fund DXJS. For more on ETFs, click here.