iPath DJ-UBS Grains Total Return Subindex (JJG) - Get Report +4.2%
Grains were powered by the continued rally in wheat prices, a historic run that started in early July. Wheat advanced more than 40% in July, but prices surged ahead in the first week of August when Russians ordered an export ban. Hot and dry weather has damaged crops and delayed planting in Russia and the production forecast now falls below domestic wheat demand.
However, wheat prices tumbled heavily on Friday, and JJG reversed some of its gains. The forecast predicts even more heat in Russia, so we'll see whether the run is over in the next week.
Market Vectors Junior Gold Miners (GDXJ) - Get Report +6.1%
Gold prices moved about $1,200 an ounce as the dollar tumbled. This in turn lifted gold miners across the board, but junior miners received an added boost when
bid $7.1 billion for Red Back Mining. Two of the largest firms in the industry,
, are said to be searching for deals, and investors are optimistic that the number of mining deals will increase.
Market Vectors Steel (SLX) - Get Report +5.1%
For China's worst-case scenario stress tests, they plan to examine the impact of a 60% drop in home prices in the more overheated cities. Bank regulators will also look at loans to steel and cement companies that could see their business decline if such a reversal took place.
With a portfolio heavily tilted towards North America, however, potential weakness in China doesn't look very threatening and didn't dent SLX. Despite the release of U.S. jobs numbers on Friday, which caused the broader market to tumble 0.4%, SLX managed to gain 0.2%. Previously, SLX often underperformed the market on down days, as bad economic data caused investors to question the strength of the recovery.
PowerShares DB U.S. Dollar Index Bullish Fund (UUP) - Get Report -1.6%
The U.S. dollar was hit from all angles last week as it lost ground vs. most major currencies. The yen is close to a 15-year high vs. the dollar, while the euro is back to where it was in early May.
iShares Dow Jones US Home Construction (ITB) - Get Report -1.0%
Housing has suffered its second losing week in a row, making the losers list both times.
reported earnings this week and saw its share price decline about 7%. Although the firm saw sales spike due to the homebuyer tax credit, CEO Donald Tomnitz doesn't want any more help from Washington. On a conference call with analysts he claimed, "We want to get back to a normalized market. It's a lot easier ... designing your business with the current demand as opposed to having any kind of stimuluses or incentives to create abnormal demand."
However, he said that the next 12 to 24 months will be very difficult.
U.S. Natural Gas (UNG) - Get Report -8.5%
Inventory levels from the week prior came in below expectations when the government reported on Thursday and investors sold natural gas futures. UNG lost ground on four out of five days this week, but the most severe losses came on Thursday and Friday following the inventory report; the fund lost more than 6% over these two days.
UNG bottomed out and traded sideways in April and May before rallying in June. This rally still looks to be in effect but has become very tenuous.
Don Dion is president and founder of
, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.
Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.