Nicholas Vardy
GLOBAL STOCK INVESTOR HOTLINE UPDATE 77
It was yet another flat week for your Global Stock Investor portfolio as most of your holdings are locked within well-trodden trading ranges. August was an exceptionally quiet month for both U.S. and global markets. Volume on the New York Stock Exchange dropped by a third from July. That meant this was the slowest August since 2002 — a month where the mood in the market was remarkably similar to the current one.
A Bet on the Biotech Bull
Bull markets have been few and far between this summer. The market’s sudden reversal from the long commodities/short financial trades in July caught money managers off guard. One of the few sectors that looks to have re-entered a bull trend is biotechnology. And this week’s Global Bull Market Alert pick, the S&P Biotech ETF (XBI), looks to capitalize on this traditionally highly volatile and boom bust burdened sector.
GLOBAL STOCK INVESTOR HOTLINE UPDATE 76
We are in the dog days of summer, and your Global Stock Investor portfolio showed little movement this week.
The Global Bull Takes on Currencies Bets, and Cuts Back on Stocks and Commodities
With the sudden unraveling of the long commodities/short financials trade in July, the number of bullish themes in global markets this summer has diminished rapidly. I am, however, comforted by the fact that every morning when I go to buy the Financial Times here in London, I walk by a currency exchange booth, where I see that every day it takes fewer and fewer dollars to buy British Pound sterling. After six years of relentless dollar weakness, the turnaround in the U.S. dollar is a welcome trend.
GLOBAL STOCK INVESTOR HOTLINE UPDATE 75
It has been another challenging week in global stock markets. The MSCI all-countries world index tumbled to a 23-month low and now is down 18% year-to-date.
Doubling Up on the U.S. Dollar’s Rally
The biggest economic story of the last week has been the continued rally in the U.S. dollar. After flirting with record lows against the euro as recently as July 15, the dollar hit a six-month high against the euro and a two-year peak against the U.K. pound sterling as the economic slowdown outside of the United States gathered pace. Here’s why I think the dollar’s bullish trend is set to continue, and why this week’s Global Bull Market Alert pick, Direxion Funds Dollar Bull 2.5x Fund (DXDBX), doubles up on last week’s bet on a sustained dollar rally.