Dogs Of The Dow Continue To Exhibit Strength

Through Friday's (3/4/2016) market close, the average return for the Dogs of the Dow of 2016 continues to outperform both the S&P 500 Index and the Dow Jones Industrial Average Index. The average return through Friday for the Dow Dogs totals 3.5% versus the S&P 500 Index return of -1.7% and the Dow Jones Industrial Average Index return of -1.9%. In 2015, the average return of the 2016 Dow Dogs equaled -9.3%.

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Of some note in the above table is the estimated earnings growth rate for the two energy stocks, Exxon and Chevron. This higher anticipated growth is partly possible due to the easier comparison for next year's energy company earnings versus this year's. With the market getting closer to a point where energy is no longer a potential detractor from overall index earnings, a resumption in earnings growth for the overall market is certainly achievable beginning in the second half of the year, all else being equal.

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Moon Kil Woong 1 year ago Contributor's comment

The bottoming of commodities is usually the alarm bell for the next wave of a economic decline as it reaches into the service sector and credit. If it gets worse from there it will pummel asset prices including the stock market and housing which if artificially propped up fall the worst when the succumb.

Remain vigilant. Most of the downturn affected overseas, but the rest of it will hit home if it continues. Commodities didn't cause the downturn, they are just the first to react as economists already know.

Alexa Graham 1 year ago Member's comment

I agree, I've always thought of commodities as the canaries of the markets.

David Templeton 1 year ago Author's comment

Readers may find the article, Supply Side Recession vs. Demand Side Expansion, of interest. The article points to the commodity weakness to one of excess supply versus weaker demand. www.financialsense.com/.../supply-side-recession-demand-expansion

Craig Newman 1 year ago Member's comment

Thanks.