Out of more than 200 industries listed in Exodus, just 4 posted negative results over the past month. Those were all in the drug sector, tethered to the obtuse racking of the biotech sector. The selling has been unrelenting and has greatly diverged from the rest of the market.
Interestingly, the top performing sector, by far, year to date, are utilities–currently up more than 14%.
The highest returns over the past month were in energy related stocks, up on average 36%, followed by aluminum (+26%) and Iron/Steel (+26%). Without question, the best performing stocks were the ones down the most in January and February, indicative of a classic dead cat bounce unsupported by improving fundamentals.
It’s also worth noting, tech stocks have lagged the rest of the market during the recent rally, up just 8.3%, representing the lowest return ex-utilities, of all the principle sectors. The tech heavy NASDAQ was up just 5%, compared to the broader based SPY return of +7%.
In other words, tech and biotech have purposely lagged, as degenerates piled in, headlong, into commodities and soon to be bankrupt retail outlets.
Screening for stocks with market caps above $10 billion, these were the standouts over the past month.
PBR +77%
CLR +77%
FCX +55%
BBD +53%
DVN +49%
VALE +41%
TSLA +39%
CX +36%
WY +32%
FCAU +27%
ULTA +27%
WDAY +26%
HPE +26%
AA +26%
FDX +26%
WHR +25%
The average return for stocks with market caps above $10 billion, over the past month was +9.7%. The average return for stocks with caps ranging from $1-5 billion was 12.3%. Markets caps $5-10 billion returned 10.6%. In general, returns were similar in all market cap groupings. The principle divergences were abundant in the tech and biotech sectors.
My take: while the idea of reflation is an alluring one. It is entirely without fundamental backing, as the Chinese economy continues to weaken–hampered by a 260% debt to GDP ratio, slowing growth and account receivables at 16 year highs.
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indicative of a classic dead cat bounce unsupported by improving fundamentals…… that hopefully is the majority opinion… bless you Dr Fly and continue spreading this good news…..
Good to see you again, Anjing.
The dead cat bounce theory believed by the majority is good news indeed. Because the Devil Dogs who believe this theory are keeping this rally going, with their wall of worry.
Frog
Show me where the Chinese economy is improving. Moreover, explain to me why we should buy commodity related stocks, since they are wholly dependent on a Chinese resurgence.
I’ll wait.
When, throughout market history, have you ever seen a country’s fundamentals change ahead of the market. Answer – never. The market always leads. My point is that we won’t know China’s economy is really recovering until it’s markets are already up 10 to 20%.
Holy shit. What did you do? There is going to be a two thousand worded rebuttal??!
Brazil is a perfect example this year. Look at the performance of ewz ytd and show me all the good news coming from that region of the world. That said, the current rally is extended at this point.
Fly, I don’t know anything about China. No one does. I do suspect that, with China being the big opaque secret it is, that by the time traders discover there are problems happening in China, that the Chinese market is probably at or near a bottom.
And I don’t know if the commodity sector will rise much more or not. But I do know an overall bull market when I see one, and this is still one right now, even though we’ve had a correction. I am long U.S. stocks. Tech may be lagging some other sectors in pulling forward out of the correction, but I think it will shine again soon.
I think You are onto something Dr Fly…..your analysis is very deep and exhaustive and your research is beyond reproach… like Mr T says pity the poor fool who doesn’t listen to you or doesn’t follow your lead…..
This is hilarious,
TSLA is 1 full Citron article away from being a 2-digit stock
What is d. gartman doing? Please don’t say rotating into biotech and tech.
PBR fundamentally has not changed. Scandals abound. Yet it’s up 77% in a mere 30 days.
If biotechnology is so beat down like oil was.. It will turn. Buy the shittiest companies with the highest debt and if possible, large short positions ASAP.
Sit on it and wait. Buy a jet in 5 years.
Few companies are bellwethers of the health of the global economy like CAT. If you haven’t figured it out yet, things are going to get much worse. Just just takes a little more time.
CAT hit 57.91 in Jan. Coming back since then. Of course, not every day will be an up day.
FROG
VERY SOON, YOU TOO WILL JOIN H. CLINTON IN HADES.
Good day
Time will tell.
Fuck China.
Fuck Oil.
Fuck the Longshanks.
I’ll wait…. well I’ll bank coin
Moosh….. Gartman has said he will never see 44$ oil in his lifetime…is he terminal?
Re China and Brazil
In March of 2008, US markets climbed back from the brink, nearly erasing earlier losses. People thought the market was forward looking in its never ending genius, deciphering economic perplexities.
The truth is, the market was an ass, markets reeled from that point on, sending the indices down 60% from that point and nearly decapitating world trade.
Do not look to the markets to predict the future, for it is an ass–always has been, always has been, always will.
TCK and VALE were not on your screens?
VALE was my bad…
BANNED
Moreover, explain to me why we should buy commodity related stocks, since they are wholly dependent on a Chinese resurgence.
Is this really what you believe…….
Frog is an idiot
May this post by Dr. Fly mark the end & the top of the mighty oil bid charade!
Frog is not an idiot. She has her beliefs and will hang by her own petard.
On the other hand, ANJING BAU is an idiot.
Anjing Bau appears to be a traditional female– one who has probably been expected to be submissive and agreeable at all times, for a significant part of her life history. Such people are opaque, like China, regardless of what their nationality is. No one has any idea what is going on behind the mask that the person has been forced to wear.
It sounds crazy but little frog is possibly growing up. Still a bimbo but developing. The child earned her first brownie button of the thinking game. Congrats kid. Overall compliment. Thinking for yourself a bit.
Without Chinese growth, commodity markets are dead in the water.
http://www.nytimes.com/2016/01/10/business/international/chinas-hunger-for-commodities-wanes-and-pain-spreads-among-producers.html?_r=0
” 93% of ALL S&P 500 stocks are trading above their 50-day moving average. ”
in the past when this happens there’s a sideways grind and blast higher
so much for destruction of the world economy I guess
tl;dr this rally ain’t built on homos