The SPDR S&P Metals & Mining (XME) exchange traded fund (ETF) is one of many ETFs benefiting from the Federal Reserve’s interest rate cut yesterday. Investors hope the lower rate will reignite the spark behind the U.S. economy and sustain demand for products made in emerging-market countries such as China and India, according to the Associated Press. Emerging-market countries have been a large source of demand for metals and mining (such as zinc, copper, aluminum, steal, lead and nickel) because they are needed to build factories, homes and businesses. Currently, XME is up 26.1% year-to-date.
Some top holdings in XME include AK Steel (AKS) at 4.9%, Steel Dynamics at 4.3% and Newmont Mining (NEM) at 4.5%. This company has started an ascent after an 18-month decline, according to Dan Fitzpatrick for TheStreet.com. Another possible factor contributing to XME’s success is that so many of the holdings invest in gold, which closed above $720 yesterday and steel, which has also been doing well with high demand.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.