As Santa gets his reindeer in game day shape someone got a message to Obama and Boehner that they have yet to get on his nice list. Obama now looks willing to raise the millionaire/billionaire threshold to $400k and Boehner seems ready to include a debt limit increase with any fiscal cliff deal, sparing us all another round of silly Treasury default fears. When these kids play nicely the markets take note, the Dow rose over 100 points yesterday and interest rates actually rose a bit – someone bring Bernanke some figgy pudding right now.
Quant isn't worried about higher US rates as 7 of today’s top 10 are US funds. All 7 are familiar to those top ranks recently led by the SPDR Industrial Select Sector Fund (XLI) in 2nd place followed by the SPDR S&P 500 Fund (SPY) and the SPDR S&P Oil & Gas Exploration & Production Fund (XOP) tied at 3rd. Technology is also represented on that list with the iShares Dow Jones U.S. Technology Index Fund (IYW) in 7th and the tech heavy Powershares QQQ Trust (QQQ) in 10th place. Quant still likes that Powershares Dynamic MagniQuant Fund (PIQ) in 8th place today, down from 3 days at 1st place. It has lagged slightly since gaining the top 10 earlier this month so it is still buyable. Rounding out the US group is the iShares S&P 500 Value Index Fund (IVE) in 9th place, its second day in the top 10 after spending a couple of weeks closer to 50th place, but even those lower ranked funds tend to outperform as IVE has.
The other three names in today’s top 10 are the two China funds that have been ruling Quant all fall. A quick look at the charts for 1st place GXC and 5th place FXI shows why, they have blown the doors off Santa’s sleigh. Almost as good has been the iShares MSCI Turkey Investable Market Index Fund (TUR) up almost 13% since we first mentioned it as an up and comer on October 12th, a period in which the S&P 500 was flat. Turkey has seen debt upgrades since then as fiscal reforms are lowering their national debt to GDP ratio. If that’s not a message for our kids in DC what is? The next few weeks will show if the Obama/Boehner happy talk is real or just sugar plum dreams, in the meantime, Quant likes the US market.