Imploding Sectors Can’t Be All Bad

Since January 1, the strongest sectors in the market have been Energy and Materials. Although down for the year, these bulwarks have weathered the storm with grace – often outperforming their brethren on the sector charts. But as they say in Texas (along with everywhere else I’ve lived), if you don’t like the weather, stick around awhile, it’ll change. So did the market today.

This week, volatility returned to these sectors. In case you were wondering, ‘volatility’ is industry-speak for pain. Energy and Materials needed an Advil today. The Energy SPDR (XLE) lost -2.76% while the Materials SPDR (XLB) gave up -4.19%. In this type of environment, sometimes there’s no place to hide.

The culprits this time were varied. The unwelcome jobs report showed employers cutting 63,000 jobs last month. Alcoa (AA) suffered a downgrade – (’outperform’-to-’perform’). Finally, energy behemoth Exxon-Mobil (XOM) lost $2.02 based on a slight correction in crude. We’re getting closer and closer to taking out the January 22nd lows.

If you’ve been watching the news, this is old hat. I doubt, dear reader, you come here looking for a re-hash of the headlines. Instead, you’re probably reading this to get a slightly different perspective on the markets. And today, I am happy to oblige your curiosity. Here’s this week’s take-away:

Go have a good weekend.

If you’re reading this message, you have your eyesight. No doubt many of you still kiss someone goodnight. Forget about the market for a few days – your portfolio will be there on Monday. As bad as it seems out there, there’s still many reasons to be thankful. As one of our subscribers put it yesterday, “I’ve got more than enough to say grace over.” To that, I will echo a hearty ‘AMEN.’