The old saying that hindsight provides 20/20 vision is probably very relevant to any attempts at market forecasting. The historic trading trend that a particular index or market sector has followed in the past tells us how it should perform going forward unless fundamentals pertinent to the particular sector change.
According to MarketWatch, the two industries that should get the most attention from investors for the next six months are manufacturing and financials. They arrive at this forecast by polling a select number of advisers with proven records over the long as well as the short term.
Interestingly, according to Ned Davis Research, the finance sector is generally one of the worst performers in the three months before major market tops. The S&P 500 Financials Index has moved from 333.41 reached on the 2nd of January 2015 to 336.08 on the 19th of June 2015 which is certainly no star performance. Meanwhile, the bullish sentiment that the top performing advisers have with regard to financials and the probability of this industry following its historical pattern means that this is an industry to watch.
The manufacturing industry, on the other hand, is set to perform well as result of the fundamental information that has become available in the recent past. The growth in health and fitness awareness, together with the fast growing wearables trend, should provide a big boost to electronics and related manufacturers. The recently released housing data with an increase in the number of permits for new housing units is also set on provide a new impetus to the manufacturing sector from building materials to appliance manufacturers and the accompanying electronics.
It would appear then that the expert forecast in respect of financials is based on historic data, while the forecast for the manufacturing sector is more reliant on fundamental information.
A few of the MarketWatch experts recommendations for financials and manufacturing for the rest of 2015 are as follows:-
Automatic Data Processing (ADP, +0.70%)
Google (GOOGL, +0.39%)
Computer and Office Equipment
Apple (AAPL, +0.80%)
Intel (INTC, +0.59%)
Electronic Components and Accessories
Skyworks Solutions (SWKS, +0.65%)
Gilead Sciences (GILD, +1.41%)
Johnson & Johnson (JNJ, +0.23%)
Allstate (ALL, -0.26%)
American Financial Group (AFG, +0.53%)
JPMorgan Chase (JPM, +1.29%)
Royal Bank of Canada (RY, +0.75%)