June 2014 Market Summary and ETF Analysis
David Fabian: The month of June was characterized by a breakout of the trading range in stocks that led to another grind higher in the equity markets. This occurred despite some modest volatility and another round of top calling by predictive experts. The SPDR S&P 500 ETF (SPY) gained 2.07% for the month and is now sitting on unrealized gains of 6.95% at the midpoint of 2014. While that is a far cry from the returns we experience last year, it certainly is a welcome sight to stock investors that continued to stay long this aging bull market.
Both the iShares Russell 2000 ETF (IWM) and PowerShares QQQ (QQQ) had a nice leap forward in the month of June as well. IWM gained 5.27% and QQQ advanced 3.12% this month. Clearly investors in high beta stocks are starting to play catch up with the large cap universe that has been leading for the majority of the year.
Surprisingly enough, the SPDR Gold Bullion ETF (GLD) and MarketVectors Gold Miners ETF (GDX) both bucked their negative sentiment and pernicious selling to re-establish some upward momentum this month. Precious metals are one area of the market that has been hard to predict this year as the tug of war between fundamental drivers and technical price action compete for supremacy.
However, this may be one area to watch for additional upside if we see GLD take out some prior key highs that were established back in March and April.
Emerging markets is another key area that I have been monitoring and we have begun adding back to our growth portfolios for clients.