US large-cap blue-chip stocks are still the place to be

In December last year I outlined a number of factors that were bullish for US stocks, and said that they would continue to be the primary beneficiary of Fed policy and other favourable macro forces. My bullish outlook has not changed, and this article explores more reasons to be bullish on large-cap US equities.

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The 5.3% correction in US equities is likely the best buying opportunity you’re going to get

For those that have been sitting in cash and have missed the 25% rise in the S&P 500 since November 2012, the recent 5.3% correction likely represents the best buying opportunity you’re going to get. The index bounced perfectly off its uptrend line and the outlook for US equities remains bullish.

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The Number That Matters

Friday was one of those days when so many markets move so dramatically that it’s hard to know what to focus on. But in this case the headline numbers – US stocks way up, gold way down, foreign markets all over the place — matter less than the interest rate on 10-year Treasuries, which spiked.

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Chart of the week: US Treasury yields spike as 30 year bond bull market comes to an end

For around 30 years US government bonds have been in a major bull market. The yield on the 10-year note made a low in July 2012 at around 1.4%, however thanks to the recent breakout above major overhead resistance it is looking increasingly likely that the multi-decade bull market in US government debt has come to an end.

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Central Banks Show “Faith in Gold” as Western Investment “Hits Obstacle”, Indian Policies Risk Surge in Smuggling

Although silver rallied, the price of gold held onto an earlier drop Tuesday morning in London, retreating from last week’s closing levels as UK and US traders returned from national holidays. Gold edged down to $1380 per ounce, half-a-percent below Friday, even as the US Dollar slipped on the currency market.

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