This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Egypt Riots Highlight Strengths in Agri, Oil Services ETFs

NEW YORK ( ETF Expert ) -- The first rumblings of protest in Egypt actually hit international newswires on Wednesday, Jan. 26. However, world markets didn't seem to care until Friday, Jan. 28 -- on the third day of street riots. And even as the crisis seemed to intensify over the weekend, stocks and commodities continued their march higher on Monday, Jan. 31.

For some, then, what happens in Egypt is staying in Egypt. A "Why" analysis on the rioting has identified high unemployment, under-employment and sharp disapproval of government direction. When you think about it, that kind of sounds like the United States, but the "Tea Party" protests and citizen anger resulted in change at the U.S. election booth.

What we haven't seen in the mainstream media coverage is analysis of "Why Now?" Heck, Mubarak has been in power for nearly 30 years, and something that few believed was imminent occurred because... because of social networking? Please!

Actually, the U.S. dollar's devaluation has resulted in a dramatic surge in commodity prices; most notably, food prices have skyrocketed. It's one thing to live under an oppressive regime or accept work that is beneath your skill or education level. It's another thing when you struggle to put food on the table.

So U.S. stimulus spending and Fed quantitative easing play a big role in Egyptian rioting? Indirectly, yes. The exchange-traded note for the Dow Jones AIG Grains Index, iPath DJ Grains (JJA) is up 55% over the last year. Egyptians have had to pay a great deal more for bread as well as a wide range of agricultural products due, in part, to the Fed-inspired decline of the dollar.

From a "cold-hearted" investment standpoint, then, what's the next move? While iPath DJ Cocoa (NIB) and iPath DJ Sugar (SGG) may have monthly momentum in the double-digit percentage range, the single commodity ETN approach is far too unpredictable. I'd be more inclined to use a total agribusiness fund like Market Vectors Agribusiness (MOO) before looking to chocolate, sugar, grains or meats.

One additional area of strength that Egypt's crisis serves to highlight is the strength in the energy sector. The country doesn't have to be an oil producer to roil a region and cause commodity prices to climb. Again, however, I do not recommend the crude commodity itself. Instead, my strong preference is for the oil services standouts that you'd find in funds like iShares DJ Oil Equipment & Services (IEZ) or SPDR Oil/Gas Equipmen/Services (XES). More oil needed... these are the companies that have the wherewithal to get more from existing wells or extract from offshore locations.

You can listen to the ETF Expert Radio Show "LIVE", via podcast or on your iPod. You can review more ETF Expert features here.

Readers Also Like:

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs