The top five holdings in this fund are Starbucks Corp (SBUX, 5.88% of assets); The Hershey Co (HSY, 5.53%); Tyson Foods Inc Class A (TSN, 5.48%); Yum Brands Inc (YUM, 5.29%); and
Coca-Cola Co (KO, 5.12%).
Invesco Dynamic Food & Beverage ETF (PBJ)
From Momentum Strategies Report
The motive force behind the broad market selling pressure in August was easy to see, namely
trade war fears. Yet when the reason for stock market weakness is easy to see, experience
teaches that any declines which the major averages suffer are likely to be recovered in short
order. That certainly appears to be the case now that stocks are clawing their way back to
quickly recover last months’ losses.
Last month’s losses can’t entirely be blamed on the U.S.-China trade war, however. The Fed’s
relatively tight monetary policy (relative to the low level of U.S. Treasury yields) is another
leading culprit behind the August stock market scare. Low government bond rates are still a
potential problem for investors, but low rates also tend to benefit equity prices from an
intermediate-term (3-6 month) perspective.
With a growing number of technical and fundamental indications pointing to the bulls still being
in control of the U.S. equity market, investors shouldn’t lose heart about the market’s prospects
in the coming months. There are an adequate number of signs to suggest that demand for
stocks is returning while safe-haven demand is (slowly) dwindling. The drastic improvement in
breadth and diminution in the number of stocks making new 52-week lows are but two such
signs that strength is returning to the broad market. A bullish posture is therefore still warranted.
Traders purchased a conservative position in the Invesco Dynamic Food & Beverage ETF
(PBJ) on September 5. My research indicates that food retail stocks are among the top relative strength and earnings growth leaders of the broad market. I recommend using a level slightly below the 34.20 level as the initial stop-loss for this trading position.
Cliff Droke, Momentum Strategies Report, www.cliffdroke.com, 707-282-5594, September 7, 2019