Stocks reversed lower Wednesday and the dollar sank amid protectionist talk from Trump officials in Davos. Apple (AAPL), Intel (INTC) and General Electric (GE) weighed on the Dow Jones industrials.
PowerShares QQQ Trust (QQQ) tumbled 1.2%, SPDR S&P 500 (SPY) shed 0.5% and SPDR Dow Jones Industrial Average (DIA) was down 0.3%. Emerging markets outperformed with iShares MSCI Emerging Markets (EEM) up 0.2%.
Gold, financials and health care led the upside among sector funds in the stock market today. Gold prices rose 1.2% to $1,352.90 an ounce.
VanEck Vectors Gold Miners (GDX) and VanEck Vectors Gold Miners (GDXJ) popped nearly 2% each, while SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) added about 1% apiece. GLD remains in buy range from a 125.95 entry. IAU is also in a buy zone, from a 12.84 entry. Both ETFs were featured in this column on Jan. 17.
Oil services, chips and retail lagged. Texas Instruments weighed with a 9% plunge after the chipmaker reported its quarterly results. Shares are 9% off their high after a strong run-up since mid-September. Graphics chip designer Nvidia (NVDA) reversed to a 2% loss.
Apple extended an earlier loss to 2% as shares pulled back below a 176.34 flat-base entry cleared Jan. 12. Also on the Dow, GE and Intel lost 3% and 2%, respectively. The three stocks were the Dow’s biggest losers.
Bitcoin climbed 2.5% to $11,113.14, after rising to as high as $11,474.21 early Wednesday, according to CoinDesk. Bitcoin Investment Trust (GBTC) clung to a 0.4% gain as it tries to snap a three-session slide. It remains below its 50-day moving average.
MidCap Play?
You won’t find household names like Apple (AAPL) or Facebook (FB) in this equity play that’s in potential buy range. But you will find market outperformers such as Jack Henry (JKHY), Churchill Downs (CHDN) and Bio-Techne (TECH).
PowerShares S&P MidCap Low Volatility Portfolio (XMLV) is staging a rebound off its 50-day moving average, which it regained early this week. That puts it in a possible buy zone. The ETF advanced nearly 8% from a late September rebound off the line, or 6% from a slightly higher flat-base buy point.
XMLV was last featured in this ETF column on Oct. 17, while it was still in buy range from that flat-base breakout.
The $1.3 billion fund, which will mark its five-year anniversary next month, tracks the S&P MidCap 400 Low Volatility Index. The index is comprised of 80 midcap stocks in the S&P MidCap 400 Index with the lowest volatility over the past 12 months. The fund and index are rebalanced and reconstituted on a quarterly basis.
Utilities made up the biggest weighting in the fund at nearly 20% of assets. Real estate was close behind at 19%; financials represented 16%, industrials 11%, and materials and information technology about 10% each.
Top holdings as of Jan. 22 included financial software maker Jack Henry & Associates, insurance broker Brown & Brown (BRO), salvaged vehicle auctioneer Copart (CPRT) and insurer W.R. Berkley (WRB). Jack Henry has gained 8% this year through Jan. 23, ahead of the S&P 500’s 6% return.
Among other stocks in the portfolio, horse racing and casino company Churchill Downs and biotech products maker Bio-Techne are up 10% and 9% YTD, respectively. Apple, by comparison, is up 5%. Facebook has advanced 7%.
The fund trails the S&P 500 with a 1% year-to-date return, according to Morningstar Direct. Its average annual return over the past three years is 12.6%, just behind the benchmark index’s 13.5% gain. XMLV carries a 0.25% expense ratio.
Tuesday’s pick, PowerShares S&P 500 High Dividend Low Volatility Portfolio (SPHD), extended a rebound from its 50-day line and is still in a potential buy zone.
