ETF to Watch: Fed decision, banking sector, earnings from Nike and General Mills
The Federal Reserve’s interest rate decision will headline Wall Street’s event calendar next week, with impacts that will ripple into virtually all aspects of the financial markets. As the Fed weighs the near-term future of monetary policy, Treasury ETFs will move into the spotlight.
At the same time, banking ETFs will remain front-of-mind for many traders. Meanwhile, investors will also receive the latest round of earnings from big players such as Nike (NYSE:NKE) and General Mills (NYSE:GIS), which will affect specific exchange traded funds that sustain larger weightings towards those two companies.
U.S. Treasury ETFs
The Fed is scheduled to release its latest policy decision on March 22. Turmoil in the banking sector seems to have taken a 50-basis-point hike off the table, with Wall Street now torn between whether the central bank will pause its rate hikes or announce an increase of 25 basis points.
As of the stock market close on Friday, Wall Street had priced in a 35.8% chance that rates will be unchanged following the meeting. That compares to a perceived 64.2% probability that markets will see a 25-basis point hike.
These policy projections will more than likely spur trading activity in the bond market, as market participants digest the latest commentary from Fed Chair Jerome Powell. In turn, this will influence ETFs tied to the Treasury and bond markets.
ETFs to watch:
- iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT)
- iShares 10-20 Year Treasury Bond ETF (NYSEARCA:TLH)
- iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF)
- iShares 3-7 Year Treasury Bond ETF (NASDAQ:IEI)
- iShares 1-3 Year Treasury Bond ETF (NASDAQ:SHY)
With investors still worried about the ongoing ripples generated from the recent turmoil in the banking sector, ETFs tied to the industry will stay in focus. These funds will act as signals of sentiment about the sector as industry leaders and regulators attempt to restore stability and trust in the system.
- Invesco KBW Bank ETF (NASDAQ:KBWB)
- SPDR S&P Bank ETF (NYSEARCA:KBE)
- First Trust Nasdaq Bank ETF (NASDAQ:FTXO)
- SPDR S&P Regional Banking ETF (NYSEARCA:KRE)
- iShares U.S. Regional Banks ETF (NYSEARCA:IAT)
- Financial Select Sector SPDR Fund (NYSEARCA:XLF)
- Vanguard Financials ETF (NYSEARCA:VFH)
- iShares U.S. Financials ETF (NYSEARCA:IYF)
- Fidelity MSCI Financials Index ETF (NYSEARCA:FNCL)
ETFs attached to Nike
Nike (NKE) will report its quarterly earnings on Tuesday, March 21. Analysts are looking for the shoe and athletic apparel maker to post EPS of $0.54 and revenue of $11.44B.
NKE can be found in 292 different exchange traded funds, but outlined below are some of the ETFs that have the largest weightings towards the stock.
ETFs to watch:
- Optimize AI Smart Sentiment Event-Driven ETF (OAIE) at 7.01% weighting
- Consumer Discretionary Select Sector SPDR ETF (NYSEARCA:XLY) at 4.53% weighting
- Monarch Blue Chips Core ETF (MBCC) at 4.16% weighting
- Direxion Daily Consumer Discretionary Bull 3X Shares (WANT) at 3.86% weighting
- American Century Focused Dynamic Growth ETF (FDG) at 3.70% weighting
ETFs attached to General Mills
On Thursday, General Mills (GIS) will announce its financial figures. Wall Street is looking for EPS of $0.92 and revenue of $4.59B. Moreover, GIS is owned by 257 exchange traded funds. Listed below are the funds that have the largest portfolio stances in General Mills.
ETFs to watch:
- First Trust Nasdaq Food & Beverage ETF (FTXG) at 8.03% weighting
- Invesco Dynamic Food & Beverage ETF (PBJ) at 5.04% weighting
- Amplify CWP Enhanced Dividend Income ETF (DIVO) at 3.94% weighting
- iShares MSCI Water Management Multisector ETF (IWTR) at 3.79% weighting
- Invesco S&P 500 Equal Weight Consumer Staple ETF (RHS)at 2.95% weighting