Drill baby, drill pledge sends oil prices down today
Oil slid as U..S President Donald Trump promised to boost U.S. crude production. Brent crude retreated almost 1% to near $80 a barrel.
Perfect Five-ETFs
Adding this dollar ETF to my Perfect 5 ETF Portfolio
Last week I sold my commodities ETF, the VanEck Agribusiness ETF (MOO) out of my Perfect 5 ETF Portfolio.
Today I’m replacing it with the Invesco DB U.S.Dollar Bullish ETF (UUP), UP 0.82% in 2025 as of January 14, 2025. The ETF gained 13.48% in 2024.
Apple’s fourth quarter iPhone stumble is bad news for stocks
Apple (AAPL) sold 5% fewer iPhones globally and lost ground to Chinese rivals in the last quarter of 2024.
The iPhone slipped a percentage point to a 18% worldwide market share in 2024, according to Counterpoint Research data. rival Samsung Electronics also gave up share to Android smart phone makers from China, led by Xiaomi and Vivo. For the full year, Apple saw a 2% decline in sales, according to Counterpoint Research. In 2024 the global smart phone market grew by 4%.
China’s deflation problem got worse in December
China’s consumer price index rose 0.1% in December from a year earlier, in line with the median forecast of economists surveyed by Bloomberg. Factory deflation extended into a 27th month, though the producer price index recorded a slower drop of 2.3%, the National Bureau of Statistics said Thursday. For the full year, consumer prices only inched up 0.2% from 2023, well short of the 1.1% gain economists had predicted at the beginning of 2024.
More bad news for stocks from the bond market today
The 20-year Treasury bond, a laggard on the government debt curve since its re-introduction in 2020, topped 5% Wednesday for the first time since 2023. The move looks to be fueled by concern that President-elect Donald Trump’s policies on tariffs and tax cuts will lead to wider deficits and rekindle inflation.
Think about gold and gold miners as two different asset classes right now
I think you want to own gold–through something like the SPDR Gold Shares ETF (GLD) right now to profit from decreasing interest rates at most of the world’s central banks, from global macro uncertainty, from the possibility of domestic violence in the United States around the election, and from what sure looks like a train wreck in U.S. fiscal policy.
In the short term. Say six to nine months–maybe even a year–from now. The SPDR Gold Shares ETF is up 24.84% for 2024 as of the September 16 close. In that same time period I think shares of gold mining companies are likely to lag the gains in gold. Shares of Barrack Gold (GOLD), the world’s second largest gold producer, are up just 15.09% in 2024.
The argument for adding more gold even now
Gold hit a new all-time high today of $2554 an ounce on the Comex for December delivery. Gold’s 20% or so gain in 2024 to date (as of August 26) is a result of strong central-bank buying plus Asian purchases plus anticipation that the Federal Reserve was about to cut interest rates. Now that Fed chair Jerome Powell has just about promised a cut at the Fed’s September 18 meeting it looks like gold will climb further in 2024 on the fundamentals. Bullish Wall Street targets say $2700 to $3,000 by the end of 2024. That’s a decent reason to hold gold. But the very scary geopolitical landscape over the next six months makes me anxious to add more gold even at the record nominal high for the metal.
Hold India ETF Through Election Volatility
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Replace IVV with RSP in Perfect 5 ETF Portfolio
I’m trying to walk a fine line here. I don’t want to eliminate my exposure to the U.S. stock market, the world’s best performer recently, but I would like to take some profits and reduce my exposure to the highest priced stocks in the U.S. market.Switching from the iShares S&P 500 Core ETF (IVV) to the Invesco S&P 500 Equal Weight ETF will have that effect.
Please Watch My New YouTube video: Hot Button Moves NOW: Buy Equal Weight S&P 500 Index ETFs
Today’s Hot Button Moves NOW video is Buy Equal Weight S&P Indexes. If you’re concerned about volatility in the tech sector but want to stay in the market, equal weight S&P indexes may be a good alternative. Stocks like Nvidia with a market cap of around 2 trillion, have a lot more weight in the common  version of the market cap weighted S&P 500  index than a stock with a smaller cap. In the last week or so, we’ve seen equal weight indexes converge with the longer-term out-performance of the  weighted indexes. Using an equal weight index lowers your exposure to the big, now more volatile stocks while keeping you in the market. The Invesco S&P 500 Equal Weight ETF (RSP) is a low expense ratio ETF (.2%) with about $55 billion in assets under management. Year to date, RSP is up 4.68% versus 9.9% year to date for the market cap weighted ETF from Vanguard (VOO). However, for the last 3 months you see a 4.3% return for the equal weight index versus a 4.19% for the market cap weighted index. In the last week, for the first time in a long time, the equal weight index outperformed the weighted index. While one week isn’t a trend, it does seem like the returns are converged. Shifting some S&P exposure from the large cap stocks to this equal weight ETF is a good choice to stay in the game with less volatility. I’m going to make this shift in my Perfect 5 ETF Portfolio on my subscription JubakAM.com site tomorrow May 16.
Replacing South Korea with India in my Perfect 5 ETF Portfolio (and adding it to Jubak Picks Portfolio too)
I try not to argue with cash flows. Especially when I’m making asset allocation decisions. And right now global cash is heading for India. A number of reasons. Portfolio managers looking for diversification need emerging markets exposure and India looks like the best bet. Going long India is, in effect going short China since much of the new India money is essentially old China money fleeing what looks like an economy set to struggle for a while. And there is an India fundamental story based on an economy headed for 7% growth. For all these reasons I’m added the Franklin FTSE India ETF (FLIN) to both my Perfect 5 ETF Portfolio as rep
My choice for overseas ETF exposure: South Korea ETF (EWY)
Deciding to sell the iShares China Large Cap ETF (FXI) out of my Perfect 5 ETF Portfolio wasn’t an especially tough decision. (See my post on May 31 “China’s economy continues to slow–and the problems don’t look temporary–so I’m selling my China ETF out of my Perfect 5 ETF Portfolio.” But that decision left me with a quandary and a hole in the portfolio. The iShares China ETF was, despite its sad performance, filling an important diversification function in the portfolio. So what asset should I add to give the portfolio the “required” non-U.S. exposure. That’s not an easy slot to fill at the moment. China’s economy is struggling and many emerging markets are carrying the big burden of falling commodity prices.
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