Riskier Sector ETFs Improve; Investors Now Betting on Economic Recovery

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This post takes a longer-term look at the performance of several ETFs since the November market bottom: the S&P 500 Index (SPY); the Russell 2000 Index (IWM); the EAFE (Europe, Australasia, Far East) Index (EFA); the Emerging Market Index (EEM); Consumer Discretionary Stocks (XLY); and Consumer Staples Stocks (XLP).

What we see is that the riskier sectors that had been more beaten down during the market decline are now outperforming small caps and emerging market issues. We're also seeing outperformance among consumer discretionary shares relative to consumer staples issues, as investors turn away from the more defensive sector and bet on economic recovery.

Comments

[Gem Hudson:]

Is it not, Wall Street? Economics is both private property and enterprise. All that the UAW manufacture. They all sell and the prosperity of the business is to be their quality pay.

But is social justice overcharging more than what could be made in the money? They all are going out of business. You should have taken your capitalism lesson.

Jan 04 10:58 AM

[athenian:]

Does anyone have the slightest idea what Gem Hudson is either saying or trying to say?


On Jan 04 10:58 AM Gem Hudson wrote:

> Is it not, Wall Street? Economics is both private property and enterprise.
> All that the UAW manufacture. They all sell and the prosperity of
> the business is to be their quality pay.
>
> But is social justice overcharging more than what could be made in
> the money? They all are going out of business. You should have taken
> your capitalism lesson.

Jan 04 11:26 AM

[gordon:]

ath- certainly not me, he's an arrogant blowhard. Brett- I have to wonder if these, especially con dis, aren't the most -shorted sectors. Take short-covering out, what
% is new money?

Jan 04 11:40 AM

[5underpar:]

Looks like Google translator.


On Jan 04 10:58 AM Gem Hudson wrote:

> Is it not, Wall Street? Economics is both private property and
> enterprise. All that the UAW manufacture. They all sell and the
> prosperity of the business is to be their quality pay.
>
> But is social justice overcharging more than what could be made in
> the money? They all are going out of business. You should have
> taken your capitalism lesson.

Jan 04 12:21 PM

[searcher:]

I think post #1 is saying (I'm 'channelling') is that the union ethos (obviously with compliant shortsighted management) made successful dermands that overran the ability of the underlying business to sustain them. Guessing the implication intended is that they (captial, management and labor) priced themselves out of the market by ignoring economics. I don't maintain that position as necessary and sufficient for the result apparent.

Jan 04 12:26 PM

[longk:]

not everything has to make sense.

So you ask yourself: Is it worth trying to make sense of the fact/event, to include the time and effort of estabishing validit and confidence interval?

Well, I can't know that ahead of time, so i make heuristic judgments based on my initial reaction to the fact, and the context in which I discovered the fact. It's important to know that you cannot know the answer ahead of time, but you can trade on it.

My first impression is that if I knew what the first poster was actually saying, I still could not trade off that knowledge, it's important for me not to wonder what he was actually saying. :P

But that judgment has an opportunity cost (1 i am willing to pay) since I will never really know if the hueristic judgment is "correct". I can only estimate its prudence in saving me time to inquire elsewhere, consiering facts that suggest a greater payoff for time invested.

Thats why i read Dr Brett's posts with care, but comments that dont make immediate sense or have immediate utility: not so much.

Jan 04 01:26 PM

[Rob Viglione:]

The increasing number of positive articles is one good sign. Decreasing VIX, TED spread, and central bank liquidity actions certainly add to the positive column, as well.

On the negative side lets add deteriorating corporate earnings, increasing tax expectations (consequence of massive government spending programs), reversion to protectionism around the world (particularly in the U.S.), and unprecedented stresses on fiat currencies (again, particularly for the USD).

Economics is a tug of war..not yet clear which side is winning.

Jan 04 01:53 PM

[Kunst:]

EEM is up 43% in a month? That sure looks sustainable! I think I'll go buy some EEV.

Jan 04 04:32 PM

[PROXIMO:]

Are you on acid?


On Jan 04 10:58 AM Gem Hudson wrote:

> Is it not, Wall Street? Economics is both private property and
> enterprise. All that the UAW manufacture. They all sell and the
> prosperity of the business is to be their quality pay.
>
> But is social justice overcharging more than what could be made in
> the money? They all are going out of business. You should have
> taken your capitalism lesson.

Jan 04 06:45 PM

[secmaven:]

Investors bet on economic recovery? What investors? Short covering investors? Momentum investors? That is an oxymoron. An investor is somebody who buys a stock for a long term gain, ie. holding period one year or more. No investor in his right mind would touch any of these ETF's or any other equity for that matter with a 50 foot pole at this point in the current bear market.

Jan 04 08:08 PM