Eagle Eye Opener: Great Rotation is a Myth; Primary Metals Sag; Office Retail Rivals Merge to Take on Staples

Eagle Eye Opener

Like Big Foot — Great Rotation a Myth (CBNC)

So far, so good this year for equity investors — with more than $43.8 billion piling into stock-based mutual funds — a post-financial collapse high, according to CNBC. But don’t read too much into the still-blurry picture of the year to come, and make the mistake of dumping your bonds to join the rush into equities. The Great Rotation? It’s an urban legend — like sightings of Big Foot. And anyone who thinks that the bond market will tank this year will be short-changing their portfolio’s potential by rolling completely into equities. So sure, redistribute some wealth if you’d like to take on more risk… but don’t give into the myth of the Great Rotation yet.

Heavy Metal Indeed: Copper, Nickel & Zinc Sink (YahooFinance)

Investors in primary metals awoke to a sinking feeling this morning — and it can be directly attributed to the volatility of investments falling to the lowest levels since October 2003. The nosedive can be attributed to supply pricing and China’s slowdown last year, but the fact is, the party is over. And what a party it was! From 2003 to 2012, the LME index of primary metal prices more than tripled, creating a super-cycle for investors. According to Bonnie Liu, analyst with the Macquarie Group Ltd., this downturn was to be expected, especially “… when the global macroeconomic picture is less clear.” We’ll just have to wait to see if this downtrend continues throughout 2013.

Taking on the Office Bully (AP)

Exclusive  Easy Exposure to the Commodities Market

Office Depot and OfficeMax have announced a merger designed to take on the sector’s big bully: Staples. The proposed deal is valued at approximately $1.2 billion — just about 5 percent of the $21 billion office supply sector. It would give every OfficeMax shareholder 2.69 shares of Office Depot for every share of OfficeMax held. Ultimately, the bully may get the last laugh, however, as the merger will most likely result in shuttering some stores, handing that market share over to the office supply leader, Staples. It’ll be interesting to see how the competition heats up this year.

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Optimism towards dealmaking has raised the S&P 500 to its highest point in five years. “More deals out there do create a good sentiment,” Kevin Divney, chief investment officer at Beaconcrest Capital Management in Boston, said.

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