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Business/Finance See other Business/Finance Articles Title: The First Quarter is in the Record Books! So Who Won? Who Lost? And What's Next? The First Quarter is in the Record Books! So Who Won? Who Lost? And What's Next? MARKET ROUNDUP Dow -200.19 to 17,776.12 S&P 500 -18.35 to 2,067.89 Nasdaq -46.56 to 4,900.88 10-YR Yield -0.03 to 1.93% Gold -$0.80 to $1,184 Crude Oil -$1.12 to $47.56 By Mike Larson It’s official: The first quarter is in the record books! So who won? Who lost? And what’s next? Well, let’s start with a breakdown of the Standard & Poor’s 500 Index groups. When I do that, I see that a lot of health-care and tech-related stocks performed very well. Managed health-care names surged around 22 percent, while health-care distributors and technology firms saw gains of around 14 percent. Meanwhile, Internet retailers tacked on around 15 percent. Other companies in the entertainment software and electronics manufacturing services businesses also turned in double-digit gains. Managed health care names surged 22 percent this quarter. On the flip side, companies in the materials space performed terribly. Aluminum, diversified metals and mining, and coal stocks were down anywhere from 17 percent to almost 19 percent in the first quarter. Oil and gas drillers, consumer finance stocks, and makers of semiconductor equipment also fared poorly. Mergers and acquisitions were a key factor driving the top individual names. Hospira (HSP, Weiss Ratings: B-) surged more than 43 percent in the quarter after pharmaceutical giant Pfizer (PFE, Weiss Ratings: B) agreed to buy it. And Kraft Foods Group (KRFT, Weiss Ratings: B-) soared 42 percent after Warren Buffett and 3G Capital Partners agreed to buy the company and fold it into their Heinz food empire. Earnings disappointments and pressure on energy markets helped drag down the top laggards in the quarter. Flash memory maker Sandisk (SNDK, Weiss Ratings: B) plunged more than 34 percent after the firm slashed its first-quarter sales forecast. Energy services firm Ensco PLC (ESV, Weiss Ratings: D+) lost around 30 percent amid weak demand for offshore drilling work. It announced plans to shut down rigs, and cut its quarterly dividend 80 percent to preserve cash. The strong dollar heavily influenced the commodities market this quarter. Crude oil futures lost around 9 percent, while gold went nowhere, in part because the euro currency tanked more than 11 percent against the buck. That was the euro’s worst quarter since it was rolled out on the world stage Jan. 1, 1999. “I believe oil is too cheap, many materials stocks are too cheap, and emerging markets names are too cheap.” So what comes next? Are materials stocks going to rack up more doggy quarters? Is the euro going to keep tanking? Are health-care and tech stocks going to keep dominating? My take is that we could see some major, “Big Reversal” trades unfold in coming months. I believe oil is too cheap, many materials stocks are too cheap, and emerging markets names are too cheap. At the same time, the dollar is wildly overvalued and market positioning is incredibly extreme. In fact, my research shows this is the single-biggest, fastest, most radical move higher in the dollar since 1984-85. That rally prompted so much pushback from U.S. monetary and fiscal authorities that it led to the Plaza Accord of September 1985. That multinational accord to weaken the dollar led to a whopping 48 percent depreciation over the next couple of years! I’m not saying we’re on the cusp of a Plaza-style deal today. What I am saying is that there’s a lot of dry tinder out there. All we need is something to light a fire under some sectors and asset classes. That, in turn, would lead to radical shifts among the leaders and laggards in the rest of 2015. But that’s just me. What do you think? Are the winners in the first quarter going to continue to win for the rest of the year? Or are the losers going to make up lost ground? Which horses are you hitching your portfolio to right now, and are you planning to change that in 2015? Here’s the link to the Money and Markets website. Share your opinions as soon as you can! Poster Comment: When I lived in Illinois, Kraft bought an old farm and built a new headquarters on it. Cost them a pretty penny, too. Post Comment Private Reply Ignore Thread
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