The S&P 500 has inched higher over the previous week, but under the surface there are some noteworthy movers. Let’s take a look at the rising and falling groups since last Wednesday.
- Solar energy stocks: Up 7 percent after California mandated solar panels on all new homes starting in 2020. The Guggenheim Solar Energy ETF (TAN) is at its highest level in more than two years. TAN isn’t very liquid, but heavily traded names in the industry include First Solar (FSLR), SunPower (SPWR) and SunRun (RUN). SolarEdge (SEDG), is the top performer in the last year.
- Basic metals and coal: These benchmarks have risen 3-6 percent. There hasn’t been much news but certain economically sensitive commodities have been lifted by the strong economy and the threat of tariffs on foreign metals. Coal has benefited from both positive sentiment in steel and rising exports from the U.S. Highly liquid names include Cliffs Natural Resources (CLF), Vale (VALE) and Freeport-McMoRan (FCX). FCX, however, has political risks associated with its operations in Indonesia.
- Retail and related companies outperformed thanks to strong economic conditions and momentum from a rally that began last summer. Macy’s (M) had strong earnings today and once-abandoned specialty names like American Eagle (AEO) and Abercrombie (ANF) are rebounding ahead of quarterly reports through the start of June. Nike (NKE) is quietly breaking out of a bullish triangle and hitting new all-time highs. Liquid names include Wal-Mart Stores (WMT), J.C. Penney (JCP) and Target (TGT).
- Housing: Housing is the worst major group in the last week after the iShares US Home Construction ETF (ITB) broke a bearish triangle to the downside. Rising interest rates and lumber prices remain a problem for this group. D.R. Horton (DHI) is the most liquid name.
- Precious metals: Gold and silver have done much worse than basic metals like steel. Rising interest rates and the U.S. dollar are the big problems. Market Vectors Gold Miners ETF (GDX) is the most liquid underlier here.