Car Sales And Home Construction Spending Will Move 2 ETFs

ETF Outlook for Tuesday, July 1, 2014

First Trust NASDAQ Global Auto Index ETF CARZ

The June auto sales numbers are released this morning and expectations are for a drop from last month.

In May the annualized rate came in at 16.7 million vehicles, the best level since the recession began. Analysts are looking for the number to fall to 16.4 million in June due to a one-time pent up demand for autos in May after a rough winter. Any number of 16.4 could be viewed as positive and should be enough to help boost the auto stocks and CARZ.

iShares MSCI United Kingdom Index ETF EWU

The PMI in the U.K. unexpectedly rose to 57.5 in June from a reading of 57.0 in May. The experts were looking for the manufacturing number to fall to 56.8 and the bullish surprise has the country’s stock index, the FTSE 100, up 0.5 percent this morning.

The new orders sub index rose to 61 from 59.5, adding to the positive reading. The ETF is trading less than one percent from a six-year high and is coming into the day on a three-day winning streak.

SPDR S&P Homebuilders ETF XHB

More good news yesterday out of the housing market sent the related shares higher and XHB closed out the session with a gain of 0.7 percent.

The ETF is now just a few pennies away from breaking above resistance to a new three-month high. Today the construction spending number that comes out at 10 am could be the catalyst to help the sector break above resistance before heading into the long holiday weekend.

Market Vectors Semiconductor ETF SMH

A 0.7 percent rally in SMH yesterday may not appear to be a big move, however from a technical perspective the ETF is in the process of breakout out of a two-week long consolidation pattern at a ten-year high. The closing price of $49.49 yesterday was the best in over a decade.

What is surprising about the breakout is that the ETF was able to outperform even though its top holding, Intel INTC, closed lower by 0.1 percent. Look for more strength in the semiconductors as INTC joins the rally.