“The stronger dollar has been cushioning some of the blow of weaker commodity prices…but not all,” Daniel Rohr, director of materials research with research firm Morningstar Inc, said in the WSJ article. “Miners need to grow production, deliver cash to shareholders and maintain a strong balance sheet, and in a weaker price environment you cannot do all three.”
Moreover, materials are strengthening, along with other cyclical sectors, are also strengthening in a rising rate environment as investors turn away from safer assets and shift into riskier areas of the market. [Late Cycle Rally has Materials ETFs Spring to Life]
Materials Select Sector SPDR
For more information on the materials sector, visit our materials category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own shares of SPY.