Nick Perry (Schaeffer's Investment Research) submits: Last week we saw a balanced overall view as consumer discretionary, biotech, industrial, and technology-related funds led while energy and natural resource funds lagged.
This week we find a distinct skew to the upside (click to enlarge):
The clean energy fund took the lead with homebuilders, energy exploration, semiconductors, and silver following behind. At the bottom of the list we find internet stocks, bonds, and healthcare.
For a longer-term perspective, the bullets below show how the ETFs listed above have faired over the last six-months, prior to this week.
Prior Six-Month Returns for This Week's Top Performing Sector Exchange Traded Funds:
* PS WilderHill Clean Energy (PBW) -19.6%
* PS Energy Exploration & Production (PXE) -6.8%
* PS Semiconductors (PSI) -12.7%
* Semiconductor HOLDRS (SMH) -6.8%
* iShares Silver Trust (SLV) n/a
* iShares GS Semiconductor (IGW) -6.2%
* SPDR Homebuilders (XHB) -25.6%
* PS Zacks Micro Cap (PZI) -2.3%
* PS Building & Construction (PKB) -17.1%
* First Trust DJ Select MicroCap (FDM) -1.2%
* PS Networking (PXQ) -5.7%
* iShares DJ U.S. Basic Materials (IYM) -4.0%
Prior Six-Month Returns for This Week's Bottom Performing Sector Exchange Traded Funds:
* PS Pharmaceuticals (PJP) +8.0%
* Pharmaceutical HOLDRS (PPH) +11.8%
* iShares DJ U.S. Consumer Goods (IYK) +7.3%
* Biotech HOLDRS (BBH) -0.2%
* iShares Lehman 1-3 Year Bond (SHY) +0.4%
* SPDR-Consumer Staples (XLP) +8.8%
* iShares DJ U.S. Healthcare (IYH) +7.5%
* iShares Lehman Aggregate Bond Fund (AGG) +1.0%
* SPDR-Health Care (XLV) +7.7%
* Internet HOLDRS (HHH) -12.7%
* iShares Lehman 7-10 Year Bond (IEF) +1.9%
* iShares Lehman 20+ Year Bond (TLT) +3.2%
This week's action was interesting for a couple of reasons. First was the dominance by semiconductors. In a column last month I discussed how some of the beaten up groups like semis, housing and networking were looking interesting so the strong performance by the PSI, SMH, and IGW has me interested in the groups.
The action in the SPDR Homebuilders (XHB) ETF was also of interest. After posting that column last month, I then followed up on my comments in a chart slide show that discussed the outlook for the group. What caught my eye this week is that the XHB was among the best performing groups despite some lackluster news headlines. In a blog post on Tuesday I noted the following...
I am still without most of my favorite analytics but still stumbled across something I thought was interesting. At the open we saw that housing was in the lead and a check of a quote of the SPDR Homebuilders (XHB) shows the ETF is up more than two percent. What caught my eye are the headlines below which are featured on the MarketWatch site:
* D.R. Horton's quarterly orders drop 25%
* KB Home delays third-quarter results
* M/I Homes lowers 2006 earnings outlook
What is interesting is that the headlines are far from "cheery" but the group is still gaining ground.
Given this strength in the face of adversity, the homebuilders ETF might be a group to keep an eye on.