With August almost in the books I believe it is worthwhile to look at some specific sectors and stocks relative to the major market averages.
For a reference point the SPX index started the year at a level of 903.25. So with today’s close at 1028.93 the overall market is up almost 14%. It is more impressive to remember that on March 9th the index closed at 676.53, after hitting a intra-day low of 666.79 (up 54% from intra-day low)
On the sector front the best performing sector has been Info Tech up almost 40% YTD.
Within the highest weighted Tech companies Apple (AAPL) stands out, up almost 100% . Google (GOOG) a more pedestrian 51%. Microsoft and Intel 27% and 38% respectively.
Also a leading sector the Materials sector has enjoyed just over a 30% YTD return
Freeport McMoran (FCX) a copper and gold company stands 167% higher than the start of the year!
Heavy weight Monsanto (MON) is only better by 18%
Consumer Discretionary names as a sector are up by 23.6% from the start of the year. This sector as it is driven by consumers has definite winners and losers. McDonald’s Corporation (MCD) which was a relative bastion of safety in the last quarter of 2008 is actually down9.8% on the year. This is likely because investors have rotated out of safety into higher beta higher risk names.
Ford (F) is back from the dead, taking the pole position of the top 15 members in this sector up 237%. Remember this company did not take government money as Chrysler and General Motors (MTLQQ.PK) did. Amazon (AMZN), up 61%, Target (TGT) up 37% and Kohls (KSS) up 45%, are three retailers that compare favorably.
The consumer staples sector is higher by only 3% as investors have rotated out of traditional safety stocks. Proctor Gamble (PG) is down 13% Wal Mart (WMT) is down almost 9% and Coca-Cola (KO) is up only 8%.
Lastly Financials are up 17% for the year. This sector has had the biggest thrill ride at the lows it was down over 50%, from the lows it is up 143%!
Goldman Sachs (GS) is up 94% to lead the charge
American Experess (AXP) is higher by 84% as the consumer is still using the little green cards.
In the Banking subsector Wells Fargo (WFC) is still down on the year losing 7.3%
Citigroup (C) still has issues down 22%
Bank of America (BAC) has recovered 27%
And J.P. Morgan Chase (JPM) is up a respectable 36% which is great by most measures, unfortunately they measure vs. Goldman Sachs typically. So Jamie Dimon is probably disappointed.
The next move in the overall market is anyone’s guess. The 10 day historical vol is calculated today at 10.79%. The VIX is stubbornly staying near the 25% level, possibly indicating we are entering a more volatile trading environment into the last 4 months of the year. The more dispersion between sectors, and between stocks in performance the more “normal” trading will be.
Remember the stock market is the ultimate forward looking indicator of future cash flows and expected growth for the economy and individual companies.
There is no better indicator out there.
Monsanto (NYSE:MON) is always one of my favorite stocks to watch, and I enjoy listening to their earnings conference call even more. Earnings are expected to be announced on June 30. With 15 analysts covering MON, the consensus per-share estimate is $0.80, and the high and low estimates are $0.85 and $0.75, respectively.
