The One Sector to Buy in the Global Recovery

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Oct. 29 (Bloomberg) -- On today's "Chart Attack," CIO and Chairman of Ritholtz Wealth Management Barry Ritholtz and Bloomberg's Adam Johnson look at materials stocks. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Time for chart attack.

A couple of charts that will make you smarter.

Today we are talking about tmi, purchasing managers index.

In japan, 32 and index.

-- pmi.

Here in the u.s., 30-month high.

Europe, near a 29-month high.

Looks like old manufacturing is doing better.

Our closer today, what do you make of that?

This tells us the recovery is continuing apace we are starting to see some spending by companies.

Starting to see possibly an uptick in hiring.

Finally starting to work.

Not going fast, but at least going the right way.

That is right.

Directionally pointing in the right place.

This beat is frustratingly slow.

The new normal.

Anytime you have a credit bubble that involves deleveraging, this is what you should be expecting.

If manufacturing is getting better around the world, how do you play it?

Our approach is to look at ways to feed into that, rather than pick which industry will be the winner, let's look at the materials that go into that and the companies that mine materials.

The way we look at that is vanguard material etf.

There it is.

Vanguard material etf.

That is a very impressive uptrend.

A very constant uptrend for several years.

Not sure a lot of people realize that.

Despite carrying a decent slug of gold miners and other precious metal miners, which has been a drag on the overall chart , this is really designed to say, is the world economy getting better, and if it does get better, the past couple of quarters we have been wondering, will we see the sequester, will the shutdown be a problem?

This chart is implying things are improving the manufacturing world globally and at the recovery accelerates, the demand for raw materials and products will really accelerate.

This is really basic stuff.

Talking about building blocks.

Not trying to over intellectualize this.

It is simple.

This is really simple.

There is steel, aluminum, and a host of other metals that go into that, plus rubber and energy.

All of that is reflected in this sort of chart.

By the way, the expense ratio is low.

Dirt cheap.

This text has been automatically generated. It may not be 100% accurate.


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