The Uptrend in US Stocks Looks Sustainable

By James Dondero | March 05, 2015

  • The big story last week is that the US Dollar closed meaningfully lower for the first time since Dec’14. We believe the dollar may have finally set an intermediate top and could be entering a trading range. Should this be the case it could clearly ease the pressure on commodities such as crude oil, which so far is holding its January lows.
  • Rates were down as well last week, and continue to stair-step lower. Peaks in yields often coincide with buying opportunities in interest sensitive groups, such as REITs and MLPs. We recently published our second white paper on MLPs which identifies seven we believe are offering compelling yields and which could generate attractive total returns.
  • US stocks on the other hand had a very nice week. Even more important than the gains themselves was the fact that key areas such as 4,800 on the NASDAQ and 1,200 on the Russell 2000 are clearly providing support. Market internals continued to improve with volume, breadth and new highs suggesting the uptrend is quite likely sustainable.
  • Finally, also improving last week were the emerging markets. India remained firm, China bolted higher, and while only time will tell, even Brazil is showing signs it may be ready to turn back up.


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