Fidelity Select Fundranker

Fundranker Blog—July 2009 Archive

Select Automotive Shines

Select Automotive is up 18.8% for July 1 though 24, 38.9% for May 1 through July 24 (nearly three months), and 131.8% for February 2 through July 24 (nearly six months). It is only down 5.6% for August 1, 2008, through July 24 (almost 12 months). Given that two of the three major American automakers were bailed out by the federal government earlier this year and also made speedy trips into and out of bankruptcy in the last few months, this incredible runup indicates a lot of investor confidence in the automotive sector. Investors must like the new direction American automakers are taking, and they must think that consumers are willing, able, and starting to buy cars again.

The American automotive industry is hugely intertwined in the American economy as well as the world economy. Consumers buy cars all over the world, automakers hire lots of people to build them, their suppliers hire lots of people to build various parts for the cars, and all those workers go out and spend the money they earn. It’s a self-feeding circle of economic improvement that can’t help but bode well for the economy.

Posted 7/24/09 11:01pm ET in Economy | Permalink | Comments (0)

Rally Resumes

The spring rally we enjoyed, after pausing for four weeks, has turned into a summer rally. The Nasdaq Composite climbed 11 sessions in a row through July 22, 2009, hitting new rally highs every day since July 15. The S&P 500 rose seven sessions in a row through July 21, hitting new rally highs on July 20 and 21. Fundranker nearly matched the Nasdaq Composite, climbing 10 sessions in a row through July 22, finally hitting a new rally high that day.

As of July 22, the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund), the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and Fundranker’s Top Eight Model Portfolio are up 52.1%, 42.3%, and 35.2%, respectively, since the bear market lows of March 9.

Investors apparently are pleased with second quarter earnings and future outlooks companies have been reporting recently. Although economic indicators are mixed at best, the stock market seems to be fulfilling its roll as an advance indicator of economic recovery.

Posted 7/23/09 11:15am ET in Economy, Fundranker, Market | Permalink | Comments (0)

Rally Pauses Four Weeks

The spring rally we enjoyed has gone on pause the last four weeks. After hitting rally highs during the week ended June 12, 2009, the Nasdaq Composite and Fundranker fell three of the last four weeks, and the S&P 500 fell all four weeks. As of July 10, the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund), the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and Fundranker’s Top Eight Model Portfolio are still up 38.6%, 31.0%, and 20.1%, respectively, for the rally since March 9, but they are down 5.5%, 7.0%, and 9.6%, respectively, since June 12.

Second quarter earnings season is upon us and quickly will tell us if and how much the economy and individual companies are beginning to recover from the recession. Given the past four weeks action in the stock market, investors clearly want to see some improvement before buying into the rally again. Several key companies will report earnings this week: Yum Brands Inc. (owns KFC, Pizza Hut, Taco Bell), IBM Corp., Marriott International Inc., Harley-Davidson Inc., and Bank of America Corp. Earnings reports from these companies will provide investors with penetrating looks at just how much the economy is beginning to recover.

Posted 7/12/09 11:38am ET in Economy, Fundranker, Market | Permalink | Comments (0)