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Competition is Stiff

By Matthew Kerkhoff

 

Dollar's up strong again and big surprise, stocks and oil are down. We've talked about the dominant themes in the market, namely the strengthening dollar and prospect of Fed rate increase ad nauseam lately, so I think today we'll just gloss over those two items. Suffice it to say that I believe dollar worries are a bit blown out of proportion. We may end up at parity with the euro (chart below), but that's not all bad. We're sharing growth with them, and US multinational corporate profits may suffer a bit, but if it helps the Eurozone recover it will eventually mean increased demand, higher corporate profits and a stronger global economy.

 

 

Yesterday's rally was largely driven by weak retail sales. It seems we're returned to a pre-taper mindset where bad news is good news, because it enhances prospects for a continued low rate environment.

 

Retails sales are an important barometer ... Log in or subscribe to continue reading.


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