Is the falling dollar good or bad for stocks?

The answer, according to Mark Hulbert, is: it depends. "Which is which depends a lot on the degree of confidence that people have in the economy general and the monetary authorities in particular."

Cbs_dollar_correlation_
Source: CBS.MarketWatch.com

The chart above plots the "correlation coefficient between the dollar’s weekly returns over the trailing 12 months." At +1 (the theoretical maximum correlation) the U.S. stock market as measured by the Wilshire 5000, would be moving in “perfect lockstep” with the dollar. Any increase (or decrease) in the value of the dollar would have been accompanied by an identical move in the market.

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Quote of the Day

"The less a man knows about the past and the present the more insecure must be his judgment of the future."     – Sigmund Freud

Category: Economy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

One Response to “Chart of the Week: Correlation Coefficient U.S. Dollar versus Equities”

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