First Half 2014 in Review: Melt up!

I've bemedium_2932154983en in the business for almost 17 years now and I can't remember a time when virtually all assets classes went up together. Needless to say these are highly unusual times. If you have investments, you should send a thank you card to the central bankers for their easy monetary policy. The ECB is trying negative rates. The Fed's balance sheet is over $4.3 trillion. The Bank of Japan is buying assets faster than the Fed! While this may not end well, the financial markets are partying like it's 1999. With that said let's take a look back at the first half of 2014.

Fixed Income

After being left for dead in 2013, the bond bulls roared back in the first half of the year. 30-year Treasury rates dropped from 3.97% to 3.36%. Long bonds outperformed equities which surprised many Wall Street strategists.

  PRICE  
  % CHG TICKER
COMPANY NAME YTD SYMBOL
ISHARES 20+YR TRSRY 11% TLT
ISHARES TIPS BD ETF 5% TIP
ISHS NAT AMT-FR MUNI 5% MUB
ISHARES MBS ETF 4% MBB
SPDR BRCLY HGH YLD 3% JNK
ISHARES CORE US AGGR 3% AGG
ISHARES IBOXX $HIYLD 3% HYG
ISHARES 3-7YR TRSRY 2% IEI
ISHS INTRM GVT/CRD 1% GVI
ISHARES 1-3YR TRSRY 0% SHY

 

Commoditiesinflation1

Pork and coffee exploded higher in the first half. Gold and silver also showed signs of life for the first time in over a year. The civil war in Iraq is likely to continue to drive crude oil higher in the second half. While Janet Yellen sees no inflation, commodity prices are flying high.

  PRICE PRICE
  PER SHR % CHG
COMPANY NAME 6/30/14 YTD
PORK BELLIES 175.22 74%
COFFEE 170.92 56%
LME-NICKEL CASH 18858.00 36%
LME-STEEL BILLET MED 390.80 36%
FEEDER CATTLE INDEX 213.37 28%
PALLADIUM 853.00 20%
CATTLE 154.40 15%
COCOA 3483.00 13%
GOLD 1315.00 9%
PLATINUM 1480.00 9%
SILVER 20.96 8%
SOYBEANS OIL 39.22 7%
CRUDE OIL 105.37 7%
SOYBEANS 1393.00 7%
CHICKEN - BROILERS A 111.29 7%
LME-SPECIAL HIGH GRD 2186.50 7%
LME-ALUMINUM 1849.75 5%
NAT GAS HENRY HUB 4.43 5%
GASOLINE UNLEAD REG 292.49 4%
UNLEADED GAS 288.75 3%
CORN 413.00 2%
SOYAMEAL USA 502.80 2%
NATURAL GAS 438.00 1%
OATS 383.00 -2%
LME-LEAD CASH 2136.00 -3%
LUMBER 298.00 -4%
LME-COPPER GRADE A 6976.00 -5%
COTTON 77.38 -6%
WHEAT 594.00 -7%
HEATING OIL 285.60 -7%
COPPER CATHODES 317.90 -9%
SUGAR 16.60 -12%
EGGS 101.50 -21%

 

US Equities by Sector

Slow growth, high yielding utilities led the charge in the first half with a 16.6% gain. Inflation also picked up with the Fed and ECB wanting higher inflation. This helped the energy and materials sectors, but was bad news for consumer stocks which were the worst performers.

  PRICE  
  % CHG TICKER
COMPANY NAME YTD SYMBOL
SPDR UTILITIES INDEX 16.6% XLU
SPDR ENERGY INDEX 13.1% XLE
SPDR HEALTH CARE SEL 9.7% XLV
SPDR MATERIALS SELCT 7.4% XLB
SPDR TECHNOLOGY IDX 7.3% XLK
SPDR FIN'L INDEX 4.0% XLF
SPDR CONSUMER STAP 3.8% XLP
SPDR INDUSTRIAL IDX 3.4% XLI
SPDR CONSMR DISC SEL -0.1% XLY

 

US Equities: Winners and Losers

  PRICE PRICE  
The Winners PER SHR % CHG TICKER
COMPANY NAME 6/30/14 YTD SYMBOL
IDENIX PHARMACEUTICA 24.10 303% IDIX
INTERCEPT PHARM 236.63 247% ICPT
INTERMUNE 44.15 200% ITMN
FURIEX PHARMACEUTICA 106.18 153% FURX
GLOBALSTAR 4.25 143% GSAT
SIBANYE GOLD 11.03 129% SBGL
VIPSHOP HOLDINGS 187.74 124% VIPS
PIONEER ENRGY SRVCES 17.54 119% PES
GT ADVNCD TECHNLGIES 18.60 113% GTAT
ACCELERATE DIAGNSTIC 26.00 113% AXDX
MANNKIND 10.96 111% MNKD
HORIZON PHARMA 15.82 108% HZNP
KARYOPHARM THRPEUTIC 46.55 103% KPTI
PLATFORM SPCIALTY PD 28.03 100% PAH
PHILLIPS 66 PRTRS LP 75.56 99% PSXP
AGIOS PHRMACEUTICALS 45.82 91% AGIO
TRIQUINT SEMICONDCTR 15.81 90% TQNT
HALCON RESOURCES 7.29 89% HK
GASLOG 31.89 87% GLOG
THE HILLSHIRE BRANDS 62.30 86% HSH
ZILLOW CLASS A 142.93 75% Z
QUESTCOR PHARMACEUTI 92.49 70% QCOR
KEURIG GREN MOUNTAIN 124.61 65% GMCR
TESLA MOTORS 240.06 60% TSLA
  PRICE PRICE  
The Losers PER SHR % CHG TICKER
COMPANY NAME 6/30/14 YTD SYMBOL
ROCKET FUEL 31.09 -49% FUEL
NEUSTAR 26.02 -48% NSR
NU SKIN ENTERPRISES 73.96 -47% NUS
GROUPON CL A 6.62 -44% GRPN
CLIFFS NATURAL RES 15.05 -43% CLF
GNC HOLDINGS 34.10 -42% GNC
ACXIOM 21.69 -41% ACXM
UTI WORLDWIDE 10.34 -41% UTIW
SINA 49.77 -41% SINA
SOUFUN HOLDINGS ADS 9.79 -41% SFUN
CONTAINER STORE GRUP 27.78 -40% TCS
COACH 34.19 -39% COH
WEIGHT WATCHER INT'L 20.17 -39% WTW
CONN'S 49.39 -37% CONN
ONESTEEL ADR 17.85 -37% OSTLY
OIL STATES INT'L 64.09 -37% OIS
NIC 15.85 -36% EGOV
PUMA BIOTECHNOLOGY 66.00 -36% PBYI
3D SYSTEMS 59.80 -36% DDD
TWITTER 40.97 -36% TWTR
WHOLE FOODS MARKET 38.63 -33% WFM
STAPLES 10.84 -32% SPLS
LULULEMON ATHLETICA 40.48 -31% LULU
BED BATH & BEYOND 57.38 -29% BBBY
LUMBER LIQUIDATORS 75.95 -26% LL
PRICESMART 87.04 -25% PSMT
BEST BUY 31.01 -22% BBY

 

Global Stock Market Indices

So which country had the best first half? The winner is... Argentina with a 52% gain! It is doubtful that you were able to take advantage of that opportunity. The infamous PIGS got some nice lipstick in 2014 -- Italy, Spain, Portugal and Greece all outperformed US markets which ended up in the middle of the pack. Japan, Russia and China finished in the red.

Index Quote YTD
Argentina 8193.65 51.99%
UAE Dubai 4399.64 30.56%
Egypt 826.65 22.40%
Denmark 750.88 22.00%
India 25823.75 21.98%
Pakistan 21900.8 17.34%
Philippines 6899.31 17.14%
Bermuda 1393.76 16.05%
Vietnam 585.02 15.93%
Thailand 1493.21 14.98%
Italy 23198.08 14.82%
Indonesia 4888.74 14.38%
Norway 575.73 14.33%
Turkey 77448.94 14.23%
S. Africa 46987.31 13.27%
Spain 1133.37 12.00%
Canada 15237.01 11.86%
Abu Dhabi 4770.74 11.20%
Portugal 2985.66 10.65%
Taiwan 9526.23 10.62%
Belgium 3196.14 9.31%
Luxembourg 1582.2 9.20%
New Zealand 5167.39 9.09%
Greece 1254.21 7.87%
S&P 500 1980.59 7.15%
NASDAQ 4470.83 7.04%
Russell 1000 1101.97 6.95%
Russell 3000 1181.87 6.64%
Peru 16758.43 6.38%
Ireland 4818.76 6.15%
Colombia 13840.43 5.88%
Switzerland 8681.18 5.83%
Sweden 1406.49 5.52%
Shenzhen A 1163.36 5.39%
Finland 7724.82 5.29%
Chile 3888.91 5.13%
Frankfurt 10009 4.78%
Netherlands 419.6 4.43%
Paris 4484.19 4.38%
Israel 1387.67 4.38%
Singapore 3273.15 3.34%
Nigeria 42686.58 3.28%
Brazil 53178.1 3.24%
JASDAQ 106.31 3.19%
Rus 2000 1199.5 3.08%
Jordan 2117.9 2.52%
Australia 5479.5 2.27%
Mexico 43457.79 1.71%
London 6856.34 1.59%
Malaysia 1888.69 1.16%
Hong Kong 23531.44 0.97%
Czech 997.79 0.88%
Korea 2010.97 -0.02%
Hungary 18554.29 -0.05%
Austria 2534.19 -0.48%
Poland 50730.32 -1.08%
Shanghai 2063.23 -2.49%
Russia 1391.2 -3.53%
Iceland 825.45 -4.56%
Mongolia 15474.79 -5.07%
Nikkei 225 15348.29 -5.79%
Jamaica 70481.87 -12.45%
become_a_blog_subscriber What do you think will happen in the second half? How are you positioned?
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About the Author: Chris Wang

Chris Wang

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