Skip to main content

Chart of the day: commodities vs. shares

Chart of the day: Dow Jones - AIG commodity index (^DJC) versus the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI), on a two year timeframe.

As you can see from the enlarged version of the chart (click chart to expand), all three indices are down by 30-40 percent over the two year period (April 2007 - April 2009).

You'll note that while US shares entered their bear market at the end of 2007, commodities to continued to outperform stocks (by a wide margin) up until the summer of 2008, when commodities joined the "liquidation party" which hit most major asset markets worldwide. Both stocks and commodities have taken their fair share of abuse on the downside since.

The three indices have staged a bit of a rally off of their early March lows, with ^DJC and ^DJI leading the way in relative performance (now down the least in percentage terms) on this two-year chart.

However, if you flip to a one-year timeframe, the stock indices, ^DJI and ^GSPC, are shown to be outpacing the commodities, ^DJC, in terms of relative performance (with commodities showing a - 45% return over the period).

Some of the long/index commodity ETFs such as DBC, DJP, and DYY seem to have been forming a base and showing strength lately (Disclosure: no position in any of these at time of writing).

Will the leading commodity indexes begin to outperform shares, or do the major US stock averages still have some juice to the upside?

Popular posts from this blog

The Dot-Com Bubble in 1 Chart: InfoSpace

With all the recent talk of a new bubble in the making, thanks in part to the Yellen Fed's continued easy money stance, I thought it'd be instructive to revisit our previous stock market bubble - in one quick chart.

So here's what a real stock market bubble looks like. 

Here's what a bubble *really* looks like. InfoSpace in 1999-2001. $QQQ$BCORpic.twitter.com/xjsMk433H7
— David Shvartsman (@FinanceTrends) February 24, 2015
For those of you who are a little too young to recall it, this is a chart of InfoSpace at the height of the Nasdaq dot-com bubble in 1999-2001. This fallen angel soared to fantastic heights only to plummet back down to earth as the bubble, and InfoSpace's shady business plan, turned to rubble.

As detailed in our post, "Round trip stocks: Momentum booms and busts", InfoSpace rocketed from under $100 a share to over $1,300 a share in less than six months. 

In a pattern common to many parabolic shooting stars, the stock soon peaked and began a…

New! Finance Trends now at FinanceTrendsLetter.com

Update for our readers: Finance Trends has a new URL! 

Please bookmark our new web address at Financetrendsletter.com

Readers sticking with RSS updates should point your feed readers to our new Finance Trends feedburner.  



Thank you to all of our loyal readers who have been with us since the early days. Exciting stuff to come in the weeks ahead!

As a quick reminder, you can subscribe to our free email list to receive the Finance Trends Newsletter. You'll receive email updates about once every 4-8 weeks (about 2-3 times per quarter). 

Stay up to date with our real-time insights and updates on Twitter.

Moneyball: How the Red Sox Win Championships

Welcome, readers. To get the first look at brand new posts (like the following piece) and to receive our exclusive email list updates, please subscribe to the Finance Trends Newsletter.

The Boston Red Sox won their fourth World Series titleof the 21st century this week.

Having won their first Series in 86 years back in 2004, the last decade-plus has marked a very strong return to form for one of baseball's oldest big league clubs. So how did they do it?

Quick background: in late 2002, team owner and hedge fund manager,John W. Henry(with his partners)bought the Boston Red Sox and its historic Fenway Park for a reported sum of $695 million.

Henry and Co. quickly set out to find their ideal General Manager (GM) to help turn around their newly acquired, ailing ship.

This brings us to one of my favorite scenes from the 2011 film, Moneyball, in which John W. Henry (played by Arliss Howard) attempts to woo Oakland A's GM Billy Beane (Brad Pitt) over to Boston with an excellent job off…