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Here are some comments I made in this weeks newsletter briefing;
-This week the utilities sector continues to weaken. Both of our utility ETF's have dropped down to the honorable mention list, but are still solid holds in our research.
-We have some big changes for the Fidelity Select Sector Fund portfolio this month. Energy looks like the place to be for the remainder of the summer, and until geopolitical troubles in Iran and the Middle East are resolved.
-Over the past 3 years, the energy sector has turned in double digit growth. Earnings in the energy sector are now flat to slightly up (y/o/y), but at much higher levels. This means that energy companies are still making a ton of money, and with this steady stream of cash, they are aggressively buying back stock.
-The Democrats have gained power in congress, and the approval ratings in the executive branch are near historic lows. If this trend continues into the 2008 elections, the democrats will gain majority power in the legislative and executive branches of our government. As such, the Healthcare and Insurance sectors will come under severe scrutiny.
I will be out of town for the rest of the week, but we suspect that the markets would attempt a push toward new high territory heading into the July 4th holiday. After July 4th, senior traders will be leaving their posts for the summer, and the July-September time frame will prove to be challenging for investors.
