Why use lots of words when pictures will suffice?
That’s my thinking every Friday when I select a handful of graphics to put important economic and investing news into perspective for you.
- Why We Revised Our Price Estimate For Monster By 20%
- Lowe’s Steps Up Its Canada Operations With RONA Acquisition
- Here’s Why Toyota Motors Is Partnering With Uber
- What Is Royal Dutch Shell’s Fundamental Value Based On Expected 2016 Results?
- Why We Lowered Our Price Estimate For Gap Inc By 30%
- Why Cliffs’ Asia Pacific Iron Ore Division Will Stop Production In The Next 4 Years
This week, I’m dishing on bull markets, excess cash, why the world’s most precious metal is getting less precious, and – last, but not least – the most outrageous economic stimulus plan ever conceived.
So, pop in that dusty ‘N Sync compact disc and say “Bye, Bye, Bye” to the long-winded commentary – and “Hey, Hey, Hey” to some pretty pictures and quick-hit observations.
Death Cross? Say it isn’t So!
Fibonacci retracement. McClellan oscillator. Parabolic Stop and Reversal.
I shudder at the thought of putting much stock, if any at all, in such technical indicators.
Lately, though, traders can’t stop wetting themselves in fear about the increasing likelihood of a “death cross” taking shape in gold prices.
They’re convinced it’s a clear sign that prices could be headed much lower.
But could it be that the precious metal is dropping in price – down about 8% year-to-date – because of a more fundamental reason?
Like, say, a drop in demand?
According to a new report from the World Gold Council, global gold demand fell 4% in 2012.
So is the recent price drop all about the fundamentals, or is it technical? I vote for the former. But feel free to debate that amongst yourselves in cyberspace.
It’s Déjà Vu All Over Again, Yogi Berra!
Last week, I proved that stocks had not run too far, too fast in 2013. Since then, I’ve done some more number crunching. And it turns out that stocks are off to their slowest start in the last three years.
Of course, stocks are rallying for the third consecutive year. So I’m not about to bemoan the repeat, repeat performance.
Forget the Mattresses, Stuff it in the Bank!
While we’re talking about bull markets, don’t you dare think that there’s nothing left to drive prices even higher.
Because investors and corporations have been hoarding cash. In the fourth quarter, “Deposits went nuts,” according to Bill Moreland of bank research firm, Bankregdata.com.
He’s not exaggerating, either. A record $312 billion poured into bank accounts.
I’m sorry. But capital ultimately flows to where it’s treated best.
With the average money market fund yielding a measly 0.7%, compared to a 2.1% yield for the average stock in the S&P 500 Index – with soaring prices, to boot – it’s only a matter of time before that cash gets reallocated.
Giddy up, bull market! Giddy up!
Be Lazy, Help the Economy
Consider this the most alternative economic stimulus plan out there: Americans with jobs should stop working so hard, so Americans without jobs can finally get one.
Why? Because new research out of Deutsche Bank demonstrates that declines in productivity do, indeed, lead to hiring booms.
So go ahead and take an extra-long lunch break today in the name of economic stimulus!
I’m totally kidding, of course.
My hope is that such an asinine suggestion might actually inspire politicians to resolve the budget impasse. That way, corporations can stop worrying about policy in Washington and get back to hiring. Now that’s a novel idea, isn’t it?
That’s it for this week. Before you go, though, let us know what you think of this weekly column – or any of our recent work at Wall Street Daily – by sending an email to firstname.lastname@example.org or leaving a comment on our website.