Thursday, June 4, 2009

Sector performance-- time analysis

Sectors the past 14 days shows some early cycle movement, but with a huge commodities outlier... but that's the weak dollar talking.   We can have a recovery with a weak dollar.  Someone said "synthetic growth" on CNBC... but isn't that how growth should start with Keynesian stimulus?

In this instance, commodities do not follw the classic textbook late cycle pattern.  I think it's odd that "economists" didn't see this coming.  Now the question is whether the dollar weakness will continue, or whether costs of commodities will stall the recovery.  Is the exit for commodities in the offing since the dollar may strengthen?

Just for fun, I looked at the same sectors over longer time periods.  I cannot glean much insight form this, but here they are:

Sectors for 60 days (from the March low) shows massive finanacial sector outperformance, but otherwise fairly broadbased from the lows.

Sectors 400 days (from the Oct 2007 high) doesn't add much to the picture... pretty much what we expect with finnies getting hammered and everything else following.

Also, I put in Aggregate Bond Index (AGG) and it outperformed all sectors going back to mid-2005! 

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