THE UNLOVED!

The past months the focus of the market has been on Tech, to put it mildly. The Nasdaq index has been on a tear and has left the other major U.S. based indexes (S&P 500, Russell, Dow Jones) in the dust.

Year to Date (YTD)

NASDAQ  +22.5%

S&P 500   – 1%

DJIA   -6.5%

Russell 2000  – 14.4%  (measures performance of approximately 2000 of the smallest cap American companies)

Rather than rehash all the positive dialog regarding the big 5 (FB, AMZN, AAPL,NFLX and GOOG) and Tesla, we are curious about those sectors/ stocks that have been left behind.

The Financial sector YTD -23%, Utilities sector YTD -10% and Energy sector YTD -39% have all had a tough run in 2020. (I have chosen the SPDR exchange traded funds as proxies)

While the Nasdaq + 22.5% (QQQ) and Technology sector +16.8% (XLK) have crushed it!

              For info on SPDR see link here: https://www.investopedia.com/articles/exchangetradedfunds/09/spdr-etfs.asp

Financial Sector: 

Low rates and flattening yield curve

Loan loss on back of pandemic developments

Competition from fintech in day to day banking services

Worries over Democratic victory in November

XLF: Top 5 holdings: 40% of fund

Berkshire Hathaway

JPMorgan Chase & Co

Bank of America

Citigroup

Wells Fargo

Energy Sector:

ESG concerns

Global growth/ demand destruction

Volatile energy prices

Pandemic concerns

Shale sector challenges

XLE: Top 5 holdings:  56% of fund

Chevron Corporation

Exxon Mobil Corporation

Kinder Morgan Inc

ConocoPhillips

EOG

Utilities Sector:

Pandemic fears

Clients unable to pay bills

Regulatory issues

Defensive in nature, suffer when market rallies

XLU: Top 5 holdings:  43% of fund  dividend yield of 3.5%

Nextera Energy Inc

Dominion energy Inc

Duke energy Corp

Southern Co

American Electric Power Company Inc

We at Minter are not ready to jump on the unloved sector bandwagon as of yet, but we think it is prudent to think about allocating some of the very strong gains out of the Tech sector and finding alternative sectors/ companies to invest in for the rest of 2020.

Contact us if you are interested in receiving real time trading signals. In doubt? Check out our track record below!

TickerDate OpenedEntry PriceStopTarget PriceCurrent Price% Change
LONG Austevoll Seafood ASA (AUSS:xosl)2020/06/0276.7572.00SPREAD TRADE79.45+3.52%
SHORT Leroy Seafood Group ASA (LSG:xosl)2020/06/0256.75SPREAD TRADESPREAD TRADE54.40+4.14%

Visit our Position Tracker to look at all of our realized trades and proven track record! 
2018: 45 Trades, Hit Ratio 53,66%, Profit +35,87 %
2019:   31 Trades, Hit Ratio 45,16%, Profit +26,97%

– Mark W

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