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Posted by on May 28, 2014 in Laif Meidell

Defense aircraft orders up durable goods

Defense aircraft orders up durable goods

By Laif Meidell, CMT, president of American Wealth Management, and portfolio manager of the AdvisorShares Meidell Tactical Advantage ETF (MATH)

Durable goods orders for April came in higher than expected on Tuesday, gaining 0.8 percent month over month and adding to the robust 2.6 percent gain in March. April’s gains surprised many analysts who were expecting a decline of 0.8 percent over the prior month. Fortunately, a 13.1 percent gain in defense aircraft orders in April was able to offset weaker numbers elsewhere such as nondefense aircraft and motor vehicle orders.

In other economic news, there was good news for homeowners as the Case-Shiller Home Price Index gained 1.2 percent in March, showing an acceleration in price gains over the prior month’s 0.8 percent rise. Although this is a positive for homeowners, the spike in prices could become a near-term deterrent to some homebuyers.

This past week, the top-performing sector was technology, with the Dow Jones U.S. Technology index gaining 2.64 percent over the past five trading days. As we have noted over the past couple of weeks, technology shares have experienced a recent character change, with the technology index falling less on down market days. Another strong performing sector was financial shares with the Dow Jones U.S. Financial index higher by 2.35 percent over the past five trading days. For comparison purposes, the Standard & Poor’s 500 index rose by 1.42 percent over the same time period.

Each week, there are typically some subsectors that significantly outperform and underperform the broad market. This week, the big winner was biotechnology, with the Nasdaq Biotechnology index gaining 3.83 percent over the past five trading days; whereas the Dow Jones U.S. Mining index fell 2.67 percent over the same period. Although biotechnology is this week’s leader, it should be approached with caution until it can re-establish itself in a sustainable uptrend.


This commentary originally published in the Reno Gazette-Journal.   Performance numbers used in this article were obtained through eSignal and are not guaranteed to be accurate.

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.