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Short McDonald's Now

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By: Melvin Pasternak of Street Authority

I have to admit it: McDonald's (NYSE: MCD) is not one of my favorite fast-food restaurants.

As I age, I am increasingly concerned about the effect diet has my health, so I try to eat lots of fruits and vegetables and avoid foods high in salt and fat. True, you can find some relatively healthy options at McDonalds if you choose wisely. However, if you indulge regularly in high-fat, sodium-rich hamburgers and fries, it can lead to an increased risk for Type 2 diabetes and heart disease, among other things.

My beef with the chain goes beyond its food, though. The company also uses way too much packaging from my point of view -- a sin it shares with many of its fast-food brethren. For anyone with a sensitive environmental conscience, what gets dumped into the trash can at the end of a McDonald's meal causes added distress.

My complaint with McDonald's stock goes beyond my dislike for the restaurant. With the broader market reeling from the effects of the Greek debt crisis and the massive sell-off in Chinese stocks, I believe McDonald's may be on the brink of a major correction. As a result, it is setting itself up as a highly profitable short trade. Continue reading "Short McDonald's Now" →

Fed Interest Rate Increase Could Be Best Thing to Happen to Gold

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The Gold Report: Common wisdom says that when the U.S. Federal Reserve raises interest rates later this year, it will prove negative for gold. Do you agree?

Jeb Handwerger: I think it'll be the opposite. Money printing and easy credit has fueled the stock market rally and beaten down commodities. Investors flocked to dividend-paying stocks, and became speculative in tech, which has led to huge overvaluations similar to the late 1990s dot-com debacle. We've had a four-year parabolic rise in the Dow without a meaningful correction. Most investors who have been in this business for a while know that every four years you get a bear market with about a 3050% correction. Rising interest rates may be the catalyst that causes investors to flee the general stock market, which has proven attractive in a low rate environment. Higher interest rates concurrent with a pickup in inflation could result in a rush to a safe haven in commodities and wealth from the earth's natural resources and precious metals, which is historically a hedge against a pickup in inflation. Continue reading "Fed Interest Rate Increase Could Be Best Thing to Happen to Gold" →

A Small Bet On Natural Gas Could Make Traders Big Profits

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By: Joseph Hogue of Street Authority

The surge in natural gas production has changed the energy landscape in the United States. Production jumped 44% between 2005 and 2014 compared to a decline of 4.5% over the previous nine-year period.

Prices for natural gas at the Henry Hub in Louisiana jumped 162% between 2002 and 2008 on lower production and an economic boom in emerging markets. By 2012, prices had fallen nearly 70% to $2.75 per million BTU. Beyond a few spikes on colder weather, prices have flatlined between $2.50 and $3.50 for the past two and a half years.

Natural Gas Prices and Production

Futures prices on the Chicago Mercantile Exchange (CME) suggest traders are not expecting much to change this year, with the December contract priced at $3.17. But two catalysts may prove speculators wrong and spark a rally in natural gas prices. Traders who get positioned now stand to make up to 50% profits without ever touching a futures contract. Continue reading "A Small Bet On Natural Gas Could Make Traders Big Profits" →

The Only Place To Find Safe Yields

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By: Joseph Hogue of Street Authority

The great bond exodus may have begun. Fears of Federal Reserve-induced interest rate increases are pushing bond yields up and bond prices down.

In fact, more than $1.2 trillion in value has been wiped out in the global bond market since April.

The selloff has accelerated when the June employment report showed that wages in May increased by the most since August 2013.

Signs of an economic recovery in Europe have also pushed losses on global bonds even further. The yield on the German 10-year bund has jumped nearly ten-fold since late April. Continue reading "The Only Place To Find Safe Yields" →