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"Signs of a Wall Street sell-off are all over the place, but U.S. stocks might well survive another week relatively unscathed if investors keep betting on sectors less vulnerable to an economic downturn."
The article basically illustrates where investors will change strategy with the change in dollar strength. The author suggests that instead of hurting the stock market as a whole, investors will just be shifting sectors. I am no financial analyst, but I see the shift as evidence of a good change. The article predicts that investors will move to "consumer staples". What that says to me, is that the strengthening dollar is good for everyday-consumers. This is where I think that real economic turnaround is going to come. The lower and middle classes are going to start spending more. Again, though, I could be way off on my analysis. Thoughts?
I agree, Dane, and so does the article "'If you continue to see the dollar strengthening,' he said, 'it should provide a headwind for commodities and for the S&P.'" A rising dollar allows for it to be able to buy more goods and services, so of course people will be getting more from their money. Also, foreign investors would hopefully like to invest in more US dollars seeing the rising trends. Exports would in theory decrease, but that sector isn't necessarily our strong suit. We tend to import more, so a strong dollar will be good for that.
ReplyDeleteThe only thing I'm worried about would be slowing our recovery. Do people think that this strong dollar is a sign that we're going to be out of the recession? Because I think we might still be stuck for a while until we can get this debt under control. So I don't know how good the strong dollar is going to be for our economy right now..