Monday, December 24, 2012

Quant likes the S&P 500 even more now that it’s 1% cheaper. The iShares (IVV) and SPDR (SPY) products that track it are in 2nd and 4th place with today’s top rank going to the iShares S&P 500 Value Index Fund (IVE). The rest of the top ranks are mostly the familiar names from the last couple of weeks but making a return to the top 25 is the SPDR S&P Metals and Mining Fund (XME) jumping 110 positions after Friday’s action into 20th place on an improving Technical Score.  It was last in these upper ranks in late October and early November.  We highlighted it on October 23rd pointing out that XME is more of an economically sensitive industrial metal fund than the silver and gold now adorning our Christmas decorations.  XME has outperformed since then and getting back into the top 25 suggests an economically sensitive posture to the market may be in order.  Washington politicians tying themselves in fiscal knots may be just what the economy needs.  Our last economic boom coincided with a balanced budget, so maybe Quant sees the fiscal cliff as our best shot at getting back to that.  Or maybe Quant sees status quo in Washington as meaning the money will keep flowing to corporate America.  We would caution that value is beating growth, a more defensive posture.  We’ll ponder Quant’s mysterious messages over some egg nog and will be back to box it up for you Wednesday morning.  Until then, God rest you merry ladies and gentlemen, we wish you comfort and joy.

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