Dan Schmeidler

Equities Update: Economy Trumps Earnings

My main concern here is how these improved earnings are going to effect the trade on the U.S. dollar. Up until now, rising equities have benefited from both improving economic indicators AND a sell-off in the U.S. dollar. The obvious effects of these counter-trends will sooner or later (have to) reveal themselves within equities and in resistance levels that will become harder and harder to break. That type of exhaustion could lend itself to a nice and smooth downward glide - fueled by the emergence of a strengthening U.S. dollar. In other words, I just don't see how these stocks can benefit from this type of an environment for that much longer.