I'm a little confused, we have seen the last two years of USD strength and stock market has been bullish. Now Greg is saying weak USD is stockmarket bullish. Well I guess people may buy stocks for the same reason as Venezuelans did, hoping the stock market will go up and counteract the inflation taking away value of their currency. However people may also look to buy stocks outside of the US that have dividends in other currencies that are gaining value. Anyway, how can currency value going up and going down both be bullish for US stocks..?
Greg is saying the FED wants inflation, however by putting up interest rates they are making US dollars stronger as bonds pay more and foreign investment is attracted to buy up USD dollars. Please explain?
It seems like the FED has taken away the punchbowl but the party keeps going. Please explain?
For the last 2 years the dollar has also traded in a range, flat. A weaker dollar makes everything more expensive, even shares of stocks.
Ok, that makes sense to me now.
If you have a weaker dollar it would have an inflationary effect. A stronger one would be deflationary?
Thx for response. I still can't understand, in late 2014 to early 2015 USD jumped from 80 to 100 on the DXY. Meanwhile the stock market went up at sustained even pace the whole time.
Isn't there a case that people will sell US dollars and move into equities and assets overseas that are based in currencies they expect to get stronger?
In Venezuela people put money in the stock market as a safe haven against hyperinflation, but is it the case that they were restricted from putting their money in foreign equities or assets?
Why has gold reacted to much to the FED going hawkish and stocks almost ignored it? Nothing makes sense! :D