U.S. Equity Mar­ket Radar (Feb­ru­ary 13, 2012)

The S&P 500 Index ended with a weekly loss for the first time this year. Tech­nol­ogy, con­sumer sta­ples and con­sumer dis­cre­tionary sec­tors were the best per­form­ers, while mate­ri­als, finan­cials and health care were the laggards.

Strengths

• The tech­nol­ogy sec­tor had a strong week, as Apple rose 7 per­cent as the com­pany is expected to release the new iPad3 in early March. Apple is the largest com­pany in world based on mar­ket cap­i­tal­iza­tion at $460 bil­lion and is the largest weight in the S&P 500.
• Else­where in the S&P 500 Tech­nol­ogy sec­tor, Com­puter Sci­ence, Aka­mai Tech­nolo­gies and JDS Uniphase all jumped more than 12 per­cent this week.
• In the con­sumer areas, tobacco stocks were very strong as Loril­lard rose nearly 10 per­cent for the week and Philip Mor­ris Inter­na­tional rose 5 per­cent. Both com­pa­nies reported earn­ings this week and reported solid pric­ing power.

Weak­nesses

• The mate­ri­als sec­tor lost more than 2 per­cent this week with broad-based weak­ness across the sector.

• Finan­cials fell by more than one per­cent as con­cerns began build­ing again regard­ing the Greek bailout.

• Among the worst per­form­ers in the S&P 500 this week were Tri­pAd­vi­sor, Joy Global and West­ern Union, all falling by more than 10 percent.

Oppor­tu­ni­ties

• Earn­ings results have been encour­ag­ing so far and the mar­ket has responded, and while we have passed the peak, we still have another week of numer­ous earn­ings announcements.

Threats

• The year began with five weeks of gains in equi­ties and the mar­ket suf­fered its first minor set­back this week. After such a strong start to the year, a pull­back or con­sol­i­da­tion in the mar­ket would not be surprising.

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., and a Toronto, Canada native, which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure. The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories. Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.” He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies. Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications. Read more from the author/contributor here.

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