Inside an economy's churn, broad opportunities and equally broad
risks exist for any investor.
My colleagues have positioned their investors on bullish
opportunities. Picks from individual strategists in Homebuilders
(XHB), Financials (PNC), Energy (ERX), and Utilities-Water (AWK)
are just a few.
But be equally aware, churn includes significant downside
Here are five industry trends to think about…
(1) Momentum in U.S. housing markets helps the
industries the most.
For Zacks Rank industries, we see strong earnings ranks tied to
Housing such as
Real Estate, Construction-Building Services, Banks-Major and
(2) Rising oil prices mostly help the
For Zacks Rank industries, we see strength in
Oil-Misc., Pipelines, and Drilling.
Also, we see a strong Zacks Rank for
We see Zacks Rank weakness in
Airlines, Oil & Gas-Integrated and Coal.
(3) Fiscal Cliff. Coming tax sunsets could raise U.S.
personal income tax rates, or impose sequestration that cuts
spending. This appears to hurt the
sectors the most.
We have seen weakness in capital goods spending and hiring
across all business sectors. For a Zacks Rank example, a weak
industry is now apparent.
(4) The U.S. drought has negative effects on the upstream
sector in such industries as
Food Distributors and Packaged Foods
who must pass on the higher input prices.
We see strength in Zacks Rank downstream industries like
Ag. Products, Fertilizers, and Ag. Chemicals
(5) China slowdown shows up in weakness in
Steel and Metals-non-Ferrous.
Some questions most investors would like to ask?
Aside from a strong Zacks Rank, what makes one industry trend
MORE interesting to an investor than another industry trend?
What did you use as timing criteria to ENTER into an investment
position that chases a current industry trend? What you do
plan to use to time your EXIT from riding this industry trend?
AMER WATER WORK (AWK): Free Stock Analysis
DIR-EGY BULL 3X (ERX): ETF Research Reports
PNC FINL SVC CP (PNC): Free Stock Analysis
SPDR-SP HOMEBLD (XHB): ETF Research Reports
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