S&P 500 Is Range-Bound, Try Gold or Pfizer

Another day, another day of round of hammer and tongs budget talks in Washington holding both a nation and its stock market hostage. Compare that to the double-digit give backs in Spanish and Italian stocks this month and suddenly treading water makes U.S. stocks a huge outperformer.

While self-admitted hyperactive trading types like Macke salute the S&P 500’s “resilience and refusal to sell-off” in the face of numerable headwinds, he also sees a benchmark that is stuck in a 7% range. And you know what? That’s just “not worth trading,” he says.

Whereas gold or the GLD ETF (NYSE:GLD) is, or at the very least, clearly worth holding on to, which is exactly what the former Minnesotan is doing. “Gold is working and I still love it,” Macke says, while conceding that it is also extended and will leave you late to the party if you are just showing up to the precious metal trough today.

If you are already in gold and looking for an alternative or additional anti-dollar strategy, the Swiss Franc (CHFUSD) is worth a look, even though it too is at a record level versus the dollar.

Meanwhile, in the swirl of synapses that is my brain, disgust with all things Washington has me looking to Europe today for another reason: Borrowing costs. The Italian 10-year note pushed above 6% for the first time since they threw the Lira overboard. For comparative reasons, in Moody’s-speak, Italy is currently Aa2 while the U.S. is AAA, but both of those ratings are on thin ice. But what struck me is that market rates move long before policymakers do and the impact is immediate.

Imagine how the debt talks in DC would look if our borrowing costs/interest expense just doubled?

See the full “Breakout” segment below:

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