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Chart of the Week Archive

Wild Ride in Metals and Mining

Wild Ride in Metals and Mining

After a free fall that saw metals and mining stocks decline over 80% throughout the summer and fall, the sector recovered strongly in December before pulling back towards the end of the month.

The SPDR S&P Metals and Mining ETF (XME) hit a 52 week high of $94.34 on June 30 and bottomed at $17.37 on November 20.  The equal-weighted fund holds 24 companies with portfolio concentrations of 70% in materials and 30% in energy.

Top hold

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Obama's Infrastructure Rally

Obama's Infrastructure Rally

As the Obama administration prepares the details behind a highly anticipated stimulus plan, investors are placing bets on sectors likely to benefit and infrastructure is among the favorites.

The Wall Street Journal reports that the new administration will need to spend $20 billion a year above current levels on roads and highways just to maintain today's levels of highway safety and traffic flow.  School building repairs, broadband expansion and energy efficiency spending on public building

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Housing Starts Hit 50 Year Low

Housing Starts Hit 50 Year Low

November housing starts dropped 19% to 625,000, the lowest level since the Commerce Department began keeping records in 1959.

According to MarketWatch, economists had predicted a seasonally adjusted pace of 725,000 in November.

New housing permits were also lower, coming in at 616,000 or 48% below November 2007.

The market reacted positively to the news

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McDonalds Earnings are Sizzling

McDonalds Earnings are Sizzling

As the rest of the economy struggles with the credit crunch and rising unemployment, McDonalds (MCD) has been on a tear.

Cumulative earnings are up 42% over the past four quarters and Q4 appears to be on track with October sales up 8.2%

With strong sales and earnings results, shareholders have been rewarded with a 33% dividend increase and a $1 billion stock buy back in Q3.

The stock price has held steady in a year when the rest of the market is down 40%.

ETFs wit

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Financials Back from the Brink

Financials Back from the Brink

After the Federal Government threw a lifeline to Citigroup (C) at the beginning of last week, the large cap financials have recovered nicely.

The Financial Select Sector SPDR Fund (XLF) is up 35% from the close on November 20.  Over the same time period, the S&P 500 (SPY) is up 19%.

XLF top holdings includes Citi as well as other major financial players such as JP M

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Gold Miners Bounce Back

Gold Miners Bounce Back

Market turmoil and stronger gold prices caused the stocks of gold mining companies to climb sharply on Friday.

The S&P 500 ETF (SPY) hit a new 52-week low on Friday before bouncing back late in the day to finish up 5% on the day.

Gold prices were also climbing at the end of the week.  The SPDR Gold Shares ETF (GLD) was up nearly 13% on the week.

Gold mining stocks were lagging until Friday when they

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Diversify with Real Estate

Diversify with Real Estate

Investors seeking to diversify a US-centric portfolio should take a hard look at real estate.

In a recently completed study, researchers found that the correlation of property securities across borders was much lower than for equities or bonds.

The averagage correlation of national returns with global ex-local returns for property securities was 0.25 in the period December 1995 to September 2008.

The same measure over the same time period was 0.64 for equities and 0.56 for bonds.

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Unemployment Climbs Sharply

Unemployment Climbs Sharply

Unemployment is at a 14 year high according to figures released by the Labor Department last Friday.

The unemployment rate spiked to 6.5% in October from 6.1%. The country has lost about 1.2 million jobs so far this year, with more than half of those losses coming in just the past three months.

The post-World War II high water mark for unemployment of 10.8% was achieved in the 1982 recession that followed the Reagan administration's ultimately successful war on inflation.

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International Stocks Fall Harder

International Stocks Fall Harder

In what has been a rough year for US stocks, international stocks are down even more.

Through October, the Vanguard FTSE All-World ex-US ETF (VEU) is down 44% compared to the Russell 3000 Index Fund (IWV) which is down 33%.

VEU includes both developed and emerging markets with ownership stakes in 2,200 stocks across 47 countries outside of the US.  IWV owns the 3,000 largest US stocks.

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Municipal Bonds Recover

Municipal Bonds Recover

After declining more than 10% since the beginning of October, municipal bonds partially recovered last week.

Municipal bond prices had been hurt by concerns over mounting government budget deficits, declining tax revenue and sales by money managers to meet redemption requests.

Historically, muni bonds have had better credit performance than corporate debt, and overall muni default rates remained very low even during the Great Depression.

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