Markets
DIA

What's Your Favorite Energy Play? - Real Time Insight

An image of a man at his desk working using two monitors
Credit: Shutterstock photo

We got the latest Fed Industrial production indexes.

Good news! Industrial production climbed +0.4% in July. That's a sixth consecutive monthly gain.

At 104.4% of its 2007 average, total industrial production in July was +5.0% above its year-earlier level. That's a decent annual rate of advance. Big U.S. companies can grow top lines annually at a similar rate.

Capacity utilization for total industry edged up 0.1% to 79.2% in July. That ratio is 1.7 points above its level of a year earlier and 0.9 points below its long-run (1972-2013) average.

Staying below that key 80% level overall should keep any inflation hawks at bay.

The Cyclical Story

A boom in cyclical auto spending drove the biggest increase in July monthly numbers. Looks like consumers hit auto showrooms hard this summer. Manufacturing output advanced +1.0% in July, its largest increase since February. Production of motor vehicles and parts jumped +10.1%. The rest of the manufacturing sector gained +0.4%.

Output of utilities dropped -3.4%. Weather was milder than usual for July. That reduced air conditioning demand.

The Structural Story

The biggest structural story across 2014 remains oil and gas. In July, production at mines moved up +0.3%, its ninth consecutive monthly increase. It's all oil & gas.

In 2014, the U.S. mining sub-index has made a big move…

Mining Index in 2014

Jan - 122.9

Feb - 123.0

March - 125.0

April - 127.7

May - 128.4

June - 130.1

July - 130.5

Six-month mining change 130.5 - 122.9 = 7.6%

Mining, on the back of oil & gas fracking, has made a +8.6% annual move.

Oil & gas is the leading entire structural growth story.

My RTI Question: What's Your Favorite U.S. Energy Play?

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SPDR-SP 500 TR (SPY): ETF Research Reports

NASDAQ-100 SHRS (QQQ): ETF Research Reports

SPDR-DJ IND AVG (DIA): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

DIA SPY QQQ

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More