Friday, October 19, 2012

Where were you 25 years ago today?  On this silver anniversary of Black Monday, that ultimate buy on the dip opportunity, our rankings are little changed from yesterday.  ETFs didn't exist in 1987 and Quant is only 8 years old so we can’t say what its message would have been back then but today it likes the US stock market with 2 out of 3 S&P 500 funds in the top 10 and the third in 11th place.  Europe had some positive bond auctions yesterday and Quant still has France in its top spot with the iShares MSCI France Index Fund (EWQ) and Spain moves up to 3rd place with the iShares MSCI Spain Index Fund (EWP). 

We last looked at Quant’s sector preferences earlier this month and now that we are deep in earnings season we see that distribution is also little changed.  On October 2 there were 9 out of 33 energy funds on the ETFG 100 list making it the favorite sector, today there are 10, still the most.  The SPDR S&P Oil & Gas Exploration & Production Fund (XOP) is the highest ranked energy fund in 5th place today.  There are also 33 funds devoted to the Basic Materials sector with 8 making the top 100 up from 6 earlier this month.  The Market Vectors Gold Miners Fund (GDX) was in 8th place then, moved down as far as 24th but is back at 8th place today.  We have one Technology fund in the top 10 today, the Vanguard Information Technology Sector Fund (VGT), and 7 out of 33 in the top 100, down from 8 on October 2.  There were 4 out of 22 Industrial funds and 4 out of 25 Health Care funds making that list then but 2 of the Health Care funds are not there today.  Quant’s least desirable sectors on October 2 are still in the dog house with the single Financial fund, out of 38, falling off that list as well as the single Consumer Staples fund, out of 13.  Those two sectors join the three without representation in the top 100 then and now, the 25 Consumer Discretionary funds, 13 Utility funds and 8 Telecomm Services funds that all fail to attract Quant’s affection today.  It still appears that Quant likes the US market but not the US dollar.

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