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David Gillie: No matter what happens, Basic Materials are needed for the job. Whether its flak jackets and gun powder for war, agriculture chemicals and pesticides for farming or coatings and ingredients for pharmaceuticals, Basic Materials are needed. Yes, even embalming chemicals and casket materials Read more…
Equities advanced for the second straight day but on lower trade. Unlike Wednesday however, stocks held their ground to finish near session highs. For the second time in as many days the Read more…
The major indices ended Monday’s session mixed on very light volume. For the seventh consecutive session stocks meandered in a tight range. The small-cap Russell 2000 showed the Read more…
David Fry From ETF Digest goes into detail on two material sector ETFs discussing the Materials Select Sector SPDR ETF (NYSE:XLB) and the ProShares Ultra Basic Materials ETF (NYSE:UYM) Read more…
Tuesday’s trading session saw a familiar scenario play out. The mass media has been broadcasting this round of Federal Reserve action in the form of Quantitative Easing (dubbed QE2) as being the Read more…
The ProShares Ultra Basic Materials ETF (NYSE:UYM) tracks the performance of a basket of stocks in the materials sector. This ETF has taken beating from it’s April high of $39.47, down as Read more…
Wolf Haldenstein Adler Freeman & Herz LLP today filed a class action lawsuit in the United States District Court, Southern District of New York, on behalf of all persons who purchased or otherwise acquired Read more…
The markets seem certain in forecasting a recovery in the economy, which could cause inflation in the immediate future. Inflation refers to the increase in the money supply, and in economics inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Read more…
Alcoa the Pittsburgh-based aluminum producer beat Wall Street’s top and bottom line expectations for the second quarter, providing a hopeful sign in the unofficial kickoff to earnings season. Read more…
ETF BASIC NEWS, IYM, UYM, XLB
Andrew Leckey from the Chicago Tribune interviewed a few people, including Jack Kasprzak from BB&T Capital Markets, to determine why basic-materials stocks have been a hot investment in recent months. Jack stated “About $29 billion in the U.S. stimulus package is dedicated to road construction, and about half that money has specific time deadlines Read more…
ETF BASIC NEWS, IYM, MXI, UYM, XLB
Inflation is an inevitability; we wrote about this back earlier this month in our article “INFLATION WILL MAKE UYM A 10 BAGGER BY THE END OF 2009!” Glenn Beck of “Fox News” has a great chart presentation that describes where the value of our money is headed. With a devalued dollar hard assets will be the place to be. We here at ETF Daily news see no better ETF fund to benefit from this scenario than UYM. Check out the video below, we appreciate your take on what the devaluation means to your portfolio.
Commodities: Crude Oil, Gasoline Decline
Most commodities were weaker in the U.S. Monday, with the majority of agricultural futures joining energy and metals on the downside.
Crude oil dropped $3.97 to $48.41 a barrel at the New York Mercantile Exchange, and reformulated gasoline was off 11 cents at $1.38 a gallon. Heating oil lost 9 cents to $1.34 a gallon, while natural gas rose.
Gold fell $7.60 to $917.70 an ounce, and silver was weaker by 23 cents at $13.03 an ounce. Aluminum and copper also slipped.
Cocoa, cotton and wheat rose, but frozen concentrated orange juice, soybeans, coffee and corn fell. Prices for lean hogs and cattle retreated.
The Reuters/Jefferies CRB Index gave back 7.09 points to 215.17.
On a day that the stock market overall sold off, most commodity-related stocks were sluggish, as well. Exxon Mobil (XOM Quote – Cramer on XOM – Stock Picks) was down 1.9% at $68.63, and Chevron (CVX Quote – Cramer on CVX – Stock Picks) lost 3.1% to $66.80. ConocoPhillips (COP Quote – Cramer on COP – Stock Picks) surrendered 3.3% to $39.02.
Miners BHP Billiton (BHP Quote – Cramer on BHP – Stock Picks) and Rio Tinto (RTP Quote – Cramer on RTP – Stock Picks) shed around 6% each, and Freeport-McMoRan (FCX Quote – Cramer on FCX – Stock Picks) lost 8.5%.
As for exchange-traded funds, the U.S. Oil (USO Quote – Cramer on USO – Stock Picks) was down 6.7% at $28.70, and the Gold Shares (GLD Quote – Cramer on GLD – Stock Picks) edged lower by 0.8% to $89.98. The Market Vectors Agribusiness (MOO Quote – Cramer on MOO – Stock Picks) fell 5.5% to $28.12.
Source: www.thestreet.com
The markets could be on the brink of turning, which makes ETF-UYM my pick of the year for 2009. The price of materials could surge by year’s end as inflation kicks in to possible hyperinflation. The more the federal government prints money, the faster I will put my money in UYM making it a 10+ bagger in the coming years! The investment “UYM” seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Basic Materials index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is non diversified.
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.The term “inflation” once referred to increases in the money supply (monetary inflation); however, economic debates about the relationship between money supply and price levels have led to its primary use today in describing price inflation.
In economics, hyperinflation is inflation that is “out of control”, a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to “inflation exceeding 50% a month.” In informal usage the term is often applied to much lower rates.
I think a lot of things will be much higher in price, including oil, next year or maybe later this year. But, don’t confuse price with value.
If there is any economic recovery globally and the dollar is falling, we could see any possible price you want to imagine but, it would be in dollars, and not other currencies.
There are several analysts that are predicting a large drop in the dollar and that will even give the markets a boost. Using an extreme example, you could see DOW 50,000 by the end of the year if the dollar gets dumped but, while you would have seen over 40,000 more pts. you couldn’t buy any more at 50,000 than now, if you sold it and probably a lot less.
The price of the DOW doesn’t reflect value, just price. Oil is the same. If there is a recovery globally, oil demand will rise and with all the supply being cut now, it will cause oil to go back up for all nations but, if the dollar is falling, even if they don’t pay more, we will. We could pay $1,000 a barrel or $10,000 a barrel or $1 million a barrel as that is what happens when a currency collapses.
For those who say that would crush our economy. Correct 100%. That too, is what happens when a currency collapses. The world basically moves on without you.
If that happens to the U.S. then the world will move on but much slower than before. Because we are such large consumers there is good news and bad news in that.
The countries that move on would find fewer buyers but, also less demand for copper, oil, steel, concrete, etc. and thus, they could still have profits even with fewer exports. They may not be large for years but, there are two sides to U.S. consumption. It drives up both the price of goods and the price of things to make goods with when we consume a lot.
Peter Schiff goes as far as to say the world’s exporters would actually be better off without us increasing demand for raw materials so much due to our consumption.
However, just as it takes a depression for us to go from debtor nation to creditor nation, it will take a global recession at the minimum to go from a global economy dependent on us to one that isn’t.
Consumption is touted as this big “cure all,” but, it isn’t. Production and making things faster than debt rises, is the cure all. Spending less than you earn, saving so you can spend in down times, budgeting, and sensible investing vs. “gambling” on stock moves is the “cure.” Less government, not more, less government spending, not more, fewer programs not more at the federal level is what we need.
If we aren’t already there then soon we will be more of a drag on the global economy than aid to it. Peter Schiff, if not right now, soon will be.
Think of it this way. You make things. I buy from you but, to keep buying from you, you have to keep loaning me money from what I pay you. To make it worse, I pay you back with devalued money so that you are even losing buying power with every new loan to me.
How long are you going to keep selling to me? You end up better off making something else and selling to somebody else or just making the stuff for “trade” and “sale” with people you buy your raw materials from.
In the last couple of years, one oil nation, Venezuela has done just that. It “trades” some of its oil instead of selling it for things it needs from nations that don’t want to “buy dollars” to buy oil with and that have materials that Venezuela needs.
Iran stopped using dollars, too. It even got Japan to buy the oil it gets from Iran in Yen as well as sell in euros to other nations.
In short, there are no certainties going forward except that we have to change the way we run this nation from top to bottom.
Source: www.ezinearticles.com
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