Two Ways to Play: Is Cash King?
Strengthen your portfolio in good times and bad.
All About the Benjamins
Cash is piling up, and more of it is on the sidelines than at any time in almost 20 years. Federal Reserve data compiled by Bloomberg shows there's currently about $8.85 trillion held in cash, bank deposits and money market funds - an amount equal to almost 75% of the market value of US companies. It marks the highest ratio since 1990. Some are viewing this as a major buying opportunity.
The S&P 500 rose an average of 24% in 6 months in the previous 8 instances when cash peaked relative to the market's capitalization. See Minyan Peter's take in Don't Believe the Hype.
From the Bull Pen: The better longer-term play could be in gold and bulls can look to the ETF (GLD) with a sell stop in the near term around $83.
From the Bear Cave: We must still be conscious that we're in a secular bear market. A rally in United Technologies (UTX) to near $55 could represent a better downside opportunity. If and when.
Quick Check Around the World
Asian trading closed with the Hang Seng +1.02%, Nikkei +0.09%, Sensex +2.19%, Taiwan -0.20% and Shanghai -0.06%.
A quick check across the pond finds the CAC +1.10%, DAX +2.08%, FTSE +2.29%
As of 8:30 a.m. EST, S&P futures are trading +1 to 869.60, and Nasdaq futures are +2 to 1190.
A Look At Commodities
Crude oil is trading +2.45 to 40.16. Gold is +13.5 to 884.70. Silver is +0.37 to 10.900, and copper is +.6500 to 131.00.
The dollar index is -0.811 to 80.081.
No events on the radar today.
Good luck and have a great day!
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