Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
Blog Home
Bob Carey
Chief Market Strategist
X •  LinkedIn

  Commodities Off To A Good Start Relative To Stocks In 2014
Posted Under: Commodities
Supporting Image for Blog Post


View from the Observation Deck 

  1. For the three-year period ended December 2013, the S&P 500 posted a cumulative total return of 56.82%, compared to a cumulative loss of 22.40% for the Dow Jones-UBS Commodity Index.
  2. Phil Flynn, senior market analyst at the Price Futures Group, noted in a MarketWatch.com article in December 2013 that the "biggest story" in 2014 would be the direction of commodity prices relative to stock prices.
  3. Flynn's take was that stocks prices were either too high or commodity prices were way too low. Either way, he believed the disparity between the two would get sorted out.
  4. Year-to-date through 4/28, the Dow Jones-UBS Commodity Index was up 9.61%, compared to a total return of 1.76% for the S&P 500.
  5. Commodity prices are rebounding despite a relatively stable U.S. dollar and low inflation. The U.S. stock market is also higher, which suggests that commodity prices were likely too low.
  6. As of 4/24/14, the sector in the S&P 500 with the highest estimated earnings growth rate for 2014 was Materials, at 27.1%, according to S&P Dow Jones Indices. The estimate for the S&P 500 was 12.1%.
  7. We believe that the recovery in commodity prices is just beginning.

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. There can be no assurance that any of the projections cited will occur. The Dow Jones-UBS Commodity Index is composed of futures contracts on 22 physical commodities. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance.

To Download a PDF of this post, please click here.

Posted on Tuesday, April 29, 2014 @ 3:03 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email

The Halftime Report
The Price Of Crude Oil Doubled Over The Past Five Years
Technology Stocks Post Highest Total Return In 20% Of Calendar Quarters Since Q1’95
An Eye on the Eurozone
Global Real Estate Recovery Lagging The Rebound In The U.S.
Never Let the Facts Get in the Way of a Good Story
The U.S. Dollar Priced Where It Stood Prior To The Financial Crisis
The Best Performing Sector Over The Last 10 Years Was Energy (On Two Fronts)
Earnings Season
Job & Economic Growth Could Drive Auto Sales Higher
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.