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If You’re Scared Today, Imagine How Bernanke Feels

Breakout

"If you look for trouble, you will find it" says the old adage. And today, trouble is really easy to find. With minimal economic data to divert our eyes, investors have only to glance at a super-heavy earnings calendar that's devoid of any forward-looking optimism — the Euro at a 12-year low and record yields on Spanish borrowing costs — to know which way this train is headed. Yes folks, the fear trade is awake and ready to roll, and the hiding places are almost non-existent.

It is, of course, times like these when you need to consult or compile a wish list and start to act upon it. As my co-host Jeff Macke and I perused the news this morning, we were struck by the fact that McDonald's (MCD) second quarter sales and earnings fell short of expectations. While the the burger chain's 5% hit taken from the strong dollar was both obvious and understandable, neither of us could recall the last time that had happened.

"It's not the news, it's the reaction," Macke says in the attached clip, calling McDonald's "the tell of the day," since the foreign currency hit should have already been in the stock. "The forex thing didn't sneak up on people," he says.

Of course, the drama in Europe is also escalating again, but neither of us are particularly moved by the latest warnings, yield spikes, or talk of the euro zone collapsing. Having heard the boy cry wolf, so the speak, for the past two-and-a-half years, it's hard to get all that worked up about anything out of Europe that we haven't already heard many times before.

At this point, with 96% of the S&P 500 down and 10-year Treasury yields slipping to 1.4%, it's a little late to take cover and a little too early to dive in.

"As you sit there and wait for things to get better," Macke says, "a nice place to wait is in cash."

While you do hide out from the turmoil, take solace in the fact that you're not alone and that, if nothing else, the Fed stands ready to act.