Materials sector closes out strong November performance on positive note

Materials was up +2.59% for the five-day period and led the S&P 500 for November, gaining +11.50% during the month. The Materials Select Sector SPDR (XLB) was up +2.43% for the week and gained nearly +15% in November.

February Comex gold (XAUUSD:CUR) pushed past the $1,800/oz mark during the week for the first time since mid-August following milder than expected U.S. inflation data and a weakening dollar on hopes for slower rate hikes from the Federal Reserve. The precious metal rose +8.9% in November, starting the month at around $1650/oz.

Benchmark three-month copper (HG1:COM) also had a good five-day trading period, rising +6.5% and reaching ~$8,200/metric ton on the London Metal Exchange, the highest since November 17.

Copper touched a five-month peak of $8,600/ton earlier in the month but has since pared gains largely on fears that rising COVID cases in China may curb metals demand.

Iron ore prices rose Tuesday and had their strongest monthly gain ever, with China’s Dalian benchmark hitting its highest level since mid-June, helped by actions to support the country’s struggling property developers.

Benchmark iron ore (SCO:COM) closed the trading week around +5% up. China’s property market and zero-COVID policy will remain headwinds to the recovery of iron ore prices.

This week’s top gainers among basic material stocks ($2B market cap or more) rose on the back of metals and industrial sector strength during the week:

• Triple Flag Precious Metals (TFPM) +15.91%
• Sigma Lithium (SGML) +13.57%
• Teck Resources (TECK) +12.77%
• Warrior Met Coal (HCC) +11.63%
• Pan American Silver (PAAS) +11.37%

Here are the top losers among basic material stocks ($2B market cap or more):

• Mosaic (MOS) -3.99%
• Methanex (MEOH) -3.77%
• CF Industries (CF) -3.73%
• Suzano (SUZ) -3.45%
• Harmony Gold Mining (HMY) -3.16%

Other materials ETFs to watch: iShares Global Timber & Forestry ETF (WOOD), Materials Select Sector SPDR ETF, Vanguard Materials ETF (VAW), iShares Global Materials ETF (MXI), SPDR S&P Metals and Mining ETF (XME), VanEck Vectors Gold Miners ETF (GDX), iShares MSCI Global Gold Miners ETF (RING), Global X Copper Miners ETF (COPX).