Top scoring weekly returns:  Buy and Hold 1 Year


 

"A stock-market decline is as routine as a January blizzard in Colorado." -- Peter Lynch.
 

The following chart updates the daily returns of the SPY so far in April, lined up against the historical April returns by trading day chart we sent in the first week of the month. History continued to rhyme again last week.

Across our 1,800 stock universe, utilities remains the best scoring sector. See later in today's report for a chart breaking out historical monthly returns for utilities over the past decade.

Industrial goods also score above the average universe score this week. Consumer goods and basic materials score in line. Basics baskets tend to offer 
 

Technology, healthcare, financials, and services all score below average.
 

The following chart visualizes score by market cap and sector.

The next chart shows the four, eight, and 12 week moving average scores since 2010.  Score continues to diverge with the S&P 500; however four week scores are nearing post-recession lows.
 

Across the most widely traded ETFs, the following ETFs offer the best and worst average return in May over the past decade (or since the ETF's inception). Natural gas, coal, oil & gas producers and metals are best.  Construction and banks have performed worst.
 

The following chart compares performance for the 20-year Treasury (TLT) relative to the S&P 500. Managers tend to de-risk through summer, providing the best months of relative performance for bonds during the year.
 

 
Utilities
 

May is historically the worst performing month for utilities following historically robust gains in March and April.  Given utilities tend to offer upside in the final half of the year -- and are particularly strong performers through summer doldrums -- May weakness may offer managers an opportunity to boost weights.

So far, the XLU has posted strong gains in each of the first four months, and has gained 14.5% so far this year.

According to the EIA's April 22nd report, net electricity generation was 4.6% higher year-over-year in February. Generation shifted to coal, which grew 16% from a year ago, as natural gas prices increased. Average retail prices improved 5.7% year-over-year in February to 10.35 cents/kwh. 
 

 

Industrial Goods
 

The following industrial goods stocks offer the best seasonality for the three months beginning May and ending July 31st. Among the list are three aerospace plays. Aerospace tends to post solid returns through the summer airshow season, with all eyes fixed on the Farnborough Show in July. Orders at Farnborough -- the show alternates each year between Farnborough and Paris -- totaled $47 billion in 2010 and $72 billion in 2012.
 

Aerospace is similarly heavily represented among our top scoring industrial goods companies this week. 
 

Top Scoring by Market Cap