Is the falling dollar good or bad for stocks?
The answer, according to Mark Hulbert, is: it depends. "Which is which depends a lot on the degree of confidence that people have in the economy general and the monetary authorities in particular."
Source: CBS.MarketWatch.com
The chart above plots the "correlation coefficient between the dollar’s weekly returns over the trailing 12 months." At +1 (the theoretical maximum correlation) the U.S. stock market as measured by the Wilshire 5000, would be moving in “perfect lockstep” with the dollar. Any increase (or decrease) in the value of the dollar would have been accompanied by an identical move in the market.
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Quote of the Day
"The less a man knows about the past and the present the more insecure must be his judgment of the future." – Sigmund Freud
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