Howdy,
Way past my bedtime..........but, I have been watching the equity markets like most folks and the maybe sell in May thingy. When broad equity markets bit the bullet in 2010 and 2011 going into the summer months; some sectors have had a slightly different path.........consumer staples, health related area and utility funds.
Consumer staples are just kinda hanging around without much action. Some medical/health sectors have maintained during the recent equity sell. In particular, I have been watching the plain jane utility area, too.
There were very narrow upward moves the past few days in the utility area and then settle back. I ran a fast page scroll tonight of utility funds (100 or so) and found the + range to be from .6 through 1.1% for today. I understand that some of these funds have some exposure to the natural gas move; but I don't feel this really has much to do with the moves in the utility sector today.
As we use Fidelity for some of our monies, this is my first quick look at their funds. FSEUX, is mostly a plain jane equity utility companies fund; but was up 1.1% today; having been pretty much flat for this year.
The question being then, why were utility funds so strong today. What say you???
---JPM and Mr. Dimon, per Scott's post and a few later articles I have read. Perhaps this was a public announce to be sure other financial institutions indeed know more about the game and please let us play nice. I do believe I will have to return the next Chase Bank credit card apply back with a personal note of "bite me".
To all of this continuing ego-manical actions by the big kids in the house; although never really missing, serfdom is alive and well. The wee folks just happen to not be working in the potato patch; but in other areas being affected.
'Course, this may be for not and be meaningless to the whole big, stinking picture.
Past this, I will have to assume the "Thumper rule" of "If I can't say anything nice, I won't say anything at all."
---JPM's "Whale" playing in London (noted last month) will cause me to watch any impact, in particular, of actions with credit quality issues, such as the junk bond sector, as he was fiddling in this area, too. Note: Asian markets, as of 11:30pm are not crashing and burning.........UPDATE, midnight. Asian markets were down about .5%; but trending much lower right now.
___12-21-12............The Mayan. Perhaps, I don't need to be concerned with the cranial/rectals playing leadership at the big banks, eh?
Thank you in advance for thoughts about the utility sector.
Lights out here................
Take care,
Catch
Comments
So, what about the utility fund sector? No comments about this area?
This sector would not hold in a market melt; but would likely perform well with a "go away in May" scenario.
Regards,
Catch
My thoughts are that Utilities are considered defensive and with NG (Natural Gas) being cheap, utilities are getting a cheaper input cost to produce electricity compared to coal, oil, and other sources. As I have mentioned, I own GASFX which is really a gas utility index. The fund intends to provide investment results that replicate the performance of the American Gas Association Stock Index.
Here a recent article that predicts positive trends in this space.
http://online.wsj.com/article/SB20001424052702303863404577283650908288014.html?ru=yahoo?mod=yahoo_itp
http://baselinescenario.com/2012/05/11/jp-morgan-debacle-reveals-fatal-flaw-in-federal-reserve-thinking/
One of the points being that TBTF banks are just TB for people in management to know what's going on ... even if they actually had a fiduciary bone in their bodies ...
On the utility question, I'm leaning toward the broad dividend etf HDV, which is heavy in defensive sectors, so I don't have to try to keep up with which one of those sectors is the likely better bet at any point in time.
Thank you for your note about HDV. Pretty much covers the normal defensive equity areas. I suppose the one outlier of the normal may be some healthcare/medical areas; as the Supreme court healthcare plan is expected to be finalized in June. This would likely only affect some insurance company areas...but who knows.
As to Simon Johnson, I have read his writings for a few years and heard him speak. He seems to be a fair minded person attempting to deal in the known facts; and moving those into what he sees going forward. The nasty part, is attempting to keep pace with his prolific writings. I don't have enough time to devote to his words.
Take care,
Catch
On the other thing, I was doing some sector rotation, mostly among consumer staples, utilities, health, and tech etf's for the last year-plus, and while it was working okay, the small %s I had committed to it didn't yield results to justify the time, so I've been looking to cut back on that type of trading.
___12-21-12............The Mayan. Perhaps, I don't need to be concerned with the cranial/rectals playing leadership at the big banks, eh?
Catch, I just heard the Mayan's figured it wrong by 6000 years!! Maybe this will light a fire under the market makers !!!
Have a good wked,
Derf