E TalkMarkets Tuesday Talk: Sideways Into July

No clear path emerged from last week’s trading and it appears that the markets are moving sideways into July. Here are some of the things some of TalkMarkets’ contributors found to say.

Brad Zigler takes a look at how alternative investments are faring year to date in Mid-Year Appraisal Of Alternative ETFs and finds that is SPDR Gold Shares Trust (GLD) that is the y-t-d winner. He has a chart of the top ten, ALT ETF investments showing performance over the last month and year to date.

 Of note is how the SPDR S&P 500 Trust (SPY) and GLD have performed similarly over the last five years:

 “GLD and SPY have basically ended up in the same place after the past five years (see below). The bullion trust grew at a compound annual growth rate of 9.5 percent while the stock fund appreciated at an average rate of 9.3 percent. The two funds, however, attained their current levels with a significantly different degree of difficulty.”

Daily ETF Performance

As for the moment, the SPDR Gold Shares Trust is up 2.23% in the last month and year to date up 16.54%.

Zigler concludes that “In the meantime, investors can content themselves with a gold exposure. It could be worse.”  

Arthur Donner and Peter Morici have two different takes on the Fed’s actions related to the COVID-19 pandemic.

Arthur Donner writes in, The Federal Reserve Massive Buying Of Government Debt, that “The current US Fed policy of quantitative easing is really in fact a version of monetizing the public debt.”

Donner further explains, “Monetizing debt is a simple process where the government issues bonds to cover its new spending. The central bank purchases the bonds from the secondary markets, and perpetually rolls them over. Thus, debt monetization leads to an increase in the money supply.”

The current increase to the money supply has been massive, larger than the Fed’s previous 3 periods of QE or quantitative easing.

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