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Friday Charts: A Mountain of Cash and Two Shocking Rebounds

It’s Friday in the Wall Street Daily Nation.

That means I’m ditching our regular routine of commentary-based articles and, instead, using charts to present some important investment and economic insights.

This week, I’m sharing the most important Fiscal Cliff-related graphic I’ve seen in weeks.

I’m not going to spend too much time on it, though, unlike other media outlets. After all, once a compromise is ultimately reached, we’ll need to get back to investing, right?

The problem is, if we wait until after a deal, we’ll have already missed some profit opportunities. So that’s why I’m going to share two overlooked opportunities brewing right under our noses…

Cash Call, Anyone?

Yesterday, I told you that the Fiscal Cliff is having a lopsided impact on investor behavior. And today, I have even more definitive proof that it’s scaring investors stockless.

Last week, investors plowed $131.9 billion into savings deposits at commercial banks.

That’s the largest weekly inflow ever, topping the cash hoarding craze that hit before Lehman Brothers collapsed, the first Greek debt failure and the first debt ceiling crisis.

However, notice how each record inflow is followed very shortly by a massive outflow? That money is going right back into investments.

The trick is to invest before that tidal wave of capital hits the market. With that in mind, here are two opportunities to consider…

Real Estate (Really!)

Longtime readers know that I called a bottom in the residential real estate market when virtually nobody believed in it.

Fast-forward to today and now everyone agrees that a rebound is, indeed, underway. They’re just not sure how long it will last.

Sorry, I don’t have an exact timeframe either. But I can tell you this: I’m more convinced than ever about my July prediction that real estate is going to propel the economy in 2013.

I have a stack of research on my desk – going back nine months – to prove it, too. Here’s the most telling bit of data. Home price increases are gaining momentum.

You can doubt me again if you want. But that’s not going to stop me from uncovering additional investments that will capitalize on the real estate rebound.

In fact, I’m getting set to reveal my latest under-the-radar real estate pick to WSD Insiders in a matter of days. If you want to be one of the first to find out what it is, all you have to do is sign up here.

Turning Japanese

Not long ago, I wrote: “Japanese stocks are some of the cheapest stocks on the planet and, therefore, a compelling ‘Buy.'”

Readers scoffed at the notion. However, it appears that more and more investors are warming up to the idea.

Over the last six months, the Nikkei 225 Index has set a series of higher lows, before going parabolic over the last two weeks. All told, Japanese stocks are up a solid 10.3% since June 1, matching the performance of the S&P 500 over the same period.

Meanwhile, China – the other cheap Asian market that many investors keep swearing is overdue for a rebound – continues to plummet. Since June 1, the Shanghai Composite Index is off another 16.9%.

If you’re looking for a super cheap momentum trade, believe it not, you should go with Japan, not China.

That’s it for today. Before you sign off, do us a favor. Let us know what you think about this weekly column – or any of our recent work at Wall Street Daily – by submitting feedback, leaving a comment on our website, or catching us on Facebook, or Google+.

Ahead of the tape,

Louis Basenese