Friday Charts: Three Trends You Won’t Believe Are Gaining Momentum
It’s Friday. And you ain’t got nothing to do since the market is closed.
So let’s get high on pictorial enlightenment together.
If you’re a newbie, don’t worry. It’s not illegal.
It’s just that each Friday, I try to keep my mouth shut and let some carefully selected graphics convey the important economic and investing insights for the week.
Today, I’m dishing on the (still) unbelievable rebound in residential real estate, pesky rumors about the dollar’s demise and a resurgent U.S. stock market.
So let’s get to it…
Dollar Bears Be Damned!
We’ve heard it for years. The U.S. dollar is doomed! And its demise could happen any day now.
Well… it’s time to replace the dollar as everyone’s favorite currency to malign.
You see, lately, the dollar has been doing anything but crumbling.
Courtesy of the banking woes in Cyprus and the ensuing flight to safety, the U.S. Dollar Index is up over 5% in the last two months.
I know, I know. It’s merely a head fake before a massive collapse, right?
At least, that’s what the dollar bears want us to believe.
New research out of Deutsche Bank, however, suggests that we might want to think otherwise.
It turns out that dollar cycles historically last for six to 10 years. Not months – years, baby!
And guess what? Deutsche Bank is convinced that we’re on the cusp of another up cycle.
Or, as its analyst puts it, “We expect the USD has now entered a sustained multi-year uptrend.”
So don’t bet against the buck!
Go Global or Go Broke… Or Not!
Not long ago, analyst after analyst warned that the supremacy of U.S. stocks would come to an end. And those sorry investors who didn’t rush into traditionally much more volatile international and emerging markets would regret it big time.
Now, I’m all for diversification. But not stupidity. And betting 100% against the United States always makes terrible sense. (Whether it relates to investing, politics, or – of course – the spirit and resilience of everyday Americans.)
Sure enough, U.S. stocks certainly haven’t been doomed.
In fact, they’ve been outperforming other global markets. So much so, that the United States’ share of the world’s total stock market cap keeps climbing.
Again, the current reading of 33.63% underscores the fact that 66.37% of investable opportunities remain outside our borders. So we should be allocating a portion of our portfolio to them, too.
But whatever you do, don’t sell your U.S. stocks to do so. Such neglect or disdain could come back to bite your bottom line.
How Do You Like Them Real Estate Prices?
If there’s one bold prediction I’ve taken serious heat for, it’s last February’s call that the real estate market hit rock bottom.
To this day, thousands of readers refuse to believe it. Even after countless metrics and data points prove that the recovery is legit.
What are they waiting for?
Well, most say they won’t believe the hype until prices recover in earnest.
Ladies and gentleman, that moment has officially arrived.
The latest reading for the widely tracked S&P/Case-Shiller Home Price Index increased 8% in January, year-over-year.
As you can see in the chart, the trend is accelerating, too…
Bottom line: The recovery is legit. But the obvious investments are getting frothy. That means, as I’ve noted before, it’s time to trim up our stops and think about putting new money to work in the sector elsewhere.
I already shared five such investments with you here. So what are you waiting for?
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 email@example.com or leaving a comment on our website.
Ahead of the tape,