U.S. Equities Address a Strong Dollar while Overseas Markets Strengthen

By James Dondero | April 10, 2015

  • While all has been quiet with the US Dollar recently, it appears to us as if the greenback may be poised to test the 100 level again, before falling into an extended trading range. Should this occur it could help crude oil, which has been building a base since January.
  • Interest rates traded in a narrow range last week, but remain well off their March highs. We still believe MLPs could offer attractive returns for investors here and recently posted an in-depth analysis in our most recent white papers.
  • Stocks are also trending higher for the week. With regard to the strong dollar’s impact on US equities, roughly 80% of US GDP is domestic-based and should see little impact from the dollar’s rise. The remaining 20% of GDP is comprised of multinationals that will ultimately be affected by a bullish dollar. Almost all market sectors achieved higher highs, possibly helping confirm an uptrend. With regard to this week’s analysis, we continue to like technology, industrials, airlines and MLPs.
  • Finally, China continues to rally as Hong Kong listed stocks play catch-up to their Shanghai listed counterparts. This, along with continued strength in India, have helped buoy the entire emerging market.

 

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