COM - Materials lag with double-digit decline in H1 amid macro pressures

Materials stocks dropped over 17% in the first half of 2022 , compared with a 21% drop for the SPDR S&P 500 Trust ETF ( SPY ). Materials Select Sector SPDR ETF ( XLB ) was also down over 19% during the period.

Industrial metals have had a rough six months, hurt by some of the tightest supply conditions ever . On the London Metal Exchange, three-month copper ( HG1:COM ) closing prices have fallen around 13%, while aluminum prices have dropped around 12% despite a rally that ended in early March.

London copper prices are lower on Thursday and are headed for a nearly 20% loss for Q2, the biggest quarterly decline since 2011 , with base metals in general headed for the worst quarterly fall since the 2008 global financial crisis.

Lumber futures ( LB1:COM ) too have tumbled in the first half by more than 43%. U.S. home prices are up 42% since the start of the pandemic, which combined with higher interest rates are making housing unaffordable, mortgage data firm Black Knight told Bloomberg.

Precious metals have had a roller-coaster year so far as well. Gold ( XAUUSD:CUR ) rallied in the aftermath of the Russia invasion and more recently as recession fears rise and central banks tighten, triggering an exodus from equities.

Gold has since entered a period of correction and has also been weighed down recently as the dollar rallied on the increasing likelihood of steep interest rate hikes by the U.S. Federal Reserve. " There's no safety trade anywhere , so gold will be liquidated," Phillip Streible, chief market strategist at Blue Line Futures in Chicago, told Reuters. "There's a massive correction going on, and when volatility gets that high, you can't find safety or comfort anywhere.

Let’s take a look at the top-performing material stocks ($2B market cap or more) for H1:

• Alpha Metallurgical Resources ( AMR ) +104.65%
• Turquoise Hill Resources ( TRQ ) +64.80%
• Sociedad Quimica y Minera de Chile ( SQM ) +64.58%
• Sigma Lithium ( SGML ) +45.70%
• CF Industries Holdings ( CF ) +21.45%

The worst performing material stocks ($2B market cap or more) for H122 were:

• Scotts Miracle-Gro ( SMG ) -52.01%
• James Hardie Industries ( JHX ) -45.81%
• Cemex SAB de CV ( CX ) -41.32%
• Summit Materials ( SUM ) -41.72%
• Quaker Chemical ( KWR ) -37.63%

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 ).

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