Investors have been waiting months for mining stocks to regain their mojo. That time may be at hand.
On the surface, the
SPDR S&P Metals & Mining
ETF (ticker: XME) had a great 2021. It returned 35% last year, outperforming the
SPDR S&P 500
ETF (SPY) by six percentage points. But nearly all of the gains came during the first four months or so of 2021. From its peak at $47.49 on June 1 through the end of 2021, the price of the SPDR S&P Metals & Mining ETF fell 5.7%.
This year has started off with a bang, too. Concerns about inflation, which hit a nearly 40-year high in December, and tighter monetary policy have pushed investors out of growth stocks and into value, and mining stocks have been among the beneficiaries. The Metals & Mining ETF has gained 5% during the first two weeks of 2022 to $46.98, near its previous highs.
Now the stocks just need to head higher. They certainly have momentum. V22 market technician John Roque notes that of the 15 stocks and ETFs that he follows, just one,
(RIO), has a neutral technical score, while 14 rate Good/Strong. None has a weak score. “The message here is consistent with our theme of focusing on commodity-related equities because if we’re not focusing on them in a commodity bull market, when would we?” Roque asks rhetorically.
And commodities really do look like they are in a bull market. Copper…
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