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Friday
Jul302010

July Asset Class Performance

DateFriday, July 30, 2010 at 05:53PM

The S&P 500 SPY ETF rallied 6.83% in the month of July.  Below is a table highlighting the performance of key ETFs across all asset classes in July (as well as YTD and over the last week).  Interestingly, largecaps here in the US outperformed smallcaps, which usually isn't the case during rallies.  Growth and value both performed about the same, while Materials, Industrials, and Energy were the best performing sectors.  Globally, Italy (EWI) did the best in July with a gain of 18%.  France (EWQ) and the UK (EWU) came in second and third with gains of 14.5%.  India (INP), Japan (EWJ), and China (FXI) were up the least during the month.

Looking at commodities, oil and natural gas were up while gold and silver were down.  The aggregate bond market ETF (AGG) was up 0.56% for the month, while long-term Treasuries (TLT) and TIPS (TIP) were down.  And with the dollar down, the British Pound (FXB) was up 4.95%, the Euro (FXE) was up 6.57%, and the Yen (FXY) was up 2.24%.

 

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Reader Comments (6)

Great info. Could you add LQD and CSJ in the bond portion?

August 1, 2010 | Unregistered CommenterDIY Investor

Great info as always. The header on the right pane is wrong.

August 1, 2010 | Unregistered CommenterCordura21

The recent rise in the Yen, FXY, during the last week, 1.1%, month, 1.3%, three months, 8.6%, is not conducive to rising stock value. The high Yen will stimulate the currency traders to sell the Euro, FXE, and European stocks, FEZ, and World Stocks, VT, will turn down. Currency deflation is likely once to once again recommence stock deflation just as it did on April 26, 2010, when the currency traders sold the world currencies against the Yen.

Institutional investors may want to consider investing in bear market mutual funds Profunds UKPSX, 200% short Japan, and the Direxion DXRSX, 200% Small Caps. In the past 90 days both of these have been up 22%.

And in as much as it appears that peak credit, AGG, and peak US Treasuries, TLT, have been achieved, credit deflation, that is bond deflation is likely to commence at a time when stocks are deflating. Therefore investors may want to consider investing in the bear market ETF Direxion, TMV, 300% inverse of the 30 Year US Government Bond, which is now in breakout from a double bottom.

The financial sector, XLF, has not participated in the emerging market financial and world stock rally that commenced in June 2010, where the emerging market financials, EMFM, were rallied strongly by rising emerging market debt, EMB, and rising emerging market currencies, CEW.

I believe that debt deflation will commence again in August 2010, inflicting the greatest damage on the financial shares, XLF, the European Financial shares, EUFN, literally destroying the value of the Russell 2000, IWM, and the European Shares, FEZ, as well as recommencing deflation in Japan, JSC, due to a persistent high yen and austerity measures being imposed by the Government.

The basic materials, XLB, compared to the Russell 2000, IWM, have rallied strongly of late, on strong emerging market performance, driven by well performing emerging market bonds, EMB, and emerging market currencies. CEW. When the stocks turn lower, I expect the Russell 2000, IWM, to fall faster than the basic materials, XLB, as these will likely be somewhat better supported by emerging market bonds, EMB, maintaining their value better than US Treasuries, TLT.

Michael Chuang of Bondsquawk in Seeking Alpha article Economic Cycle Research Institute Falls Deeper Into the Abyss writes: ”The Economic Cycle Research Institute released its Weekly Leading Indices for the week ending July 23. While the Weekly Leading Index ticked up to 121.1 from a downward revised prior period reading of 120.6, the Weekly Growth Rate Index fell further by two-tenths of a percent to -10.7 percent. This latest reading marks the 12th decline in a row and 8th straight week in negative territory, dating back to the first week in June”. And he provides the chart of ECRI Weekly Leading Index which peaked in April when debt deflation commenced with the sell off of the Euro, FXE, and the world currencies, DBV. The ECRI Weekly Leading Index has fallen rapidly lower; this indicates that the current level of the Russell 2000, IWM, the European stocks, FEZ, and the Japanese stocks, EWJ, cannot be maintained.

Here in the US, I envision, that out of a coming credit crisis, where there is no credit available, a Financial Regulator, a Credit Seignior, will exercise Discretionary Governance, and announce a Home Leasing Program administered by the banks on their REO properties and those of Freddie Mac, Fannie Mae and the US Federal Reserve. Mortgage lending and securitization of loans will cease, and leasing of homes will be a public private partnership cooperative endeavor. Companies that have done servicing mortgage debt, such as Anworth Mortgage Asset Corporation, ANH, will quickly disappear from the economic landscape, as mortgage bond funds such as Goldman Sachs Mortgage Bonds, GSUAX, tumble in value. I also envision this Credit Seignior, perhaps in private partner partnership with American Express, AXP, and Capitol One Finance, COF, issuing credit mostly to those companies which serve strategic national needs.

In Europe, I envision a new role for the President of the ECB. I envision that in response to severe credit contraction and banking ill-liquidity, that he also will be Credit Seignior, as he accepts sovereign and other debt and issues credit to Eurozone member banks thereby keeping some degree of money liquidity flowing.

I also believe that as credit deteriorates the value of excess reserves will rapidly decrease as well. Dr. Housing Bubble in article Japan Iwato And Heisei Stock And Housing Bubbles presents a chart of Excess Reserves totalling over $1 Trillion at the current time. These are largely the US Treasuries that the Federal Reserve swapped out to recapitalize the banks through its QE TARP Facility. The so-called excess reserves are residing at the US Treasury. As the value of US government bonds, IEF, and TLT, and ZROZ, falls lower, the value of the excess reserves will shrink dramatically in value, as either the banks pull them and sell to stay capitalized or simply “rot on the vine” so as to speak.

Personal investors may want to consider investing in gold. Jesse in chart article provides the chart of gold, $GOLD indicating a base of $1,155; it traded last at $1,180.

Gold, GLD, rose to resistance at 115. Support is lower at 114, 113 and 112. It will either break out here, or at one of those lower levels as investors transfer out of bonds, AGG, and stocks, VT, fall lower, and as the yield curve, $TYX:$TNX, continues to STEEPEN. The dark cloud covering candlestick in the yield curve suggests that investment demand for the Ten Year note, relative to the Year Bond, is over. And that a top in the ten-year note, IEF, is now in.

And the yield curve $TYX:$TNX in manifesting a dark cloud covering candlestick, suggests that the yield curve will cool for a bit, before it continues on even higher, as debt deflation raves fiat investments.

August 1, 2010 | Unregistered Commentertheyenguy

graet info as always .

August 2, 2010 | Unregistered CommenterNikki Roy

Global set of data has typo as the second column of numbers is "1-Month" not "1-Week"

August 2, 2010 | Unregistered Commentersc

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